COVID downturn, shutdowns put Dutchess budget deep in the red

When it comes to Dutchess County’s finances, all eyes are on Washington, D.C.

Federal aid will decide the financial future of both the county and New York State, said Dutchess County Budget Director Jessica White in a presentation to the county legislature Aug. 6.

By the end of the year, sales tax revenue could be down from $20 million to $40 million, White said. Sales tax receipts plummeted statewide due to COVID-related closures and have rebounded slowly. The county is also facing unemployment over 11%.

Sales taxes account for 40% of the county’s $500M annual budget. 

“Right now, we’re down 11.5% year to date,” she said.

Casino tax revenue is also down by about $1 million. Hotel taxes in the second quarter were down by about 80% and will drop a projected $2 million by the end of the year. County clerk revenue is also expected to drop by almost $1 million. And with fuel prices low and fewer people traveling, tax revenue from gasoline is down sharply.

The state and county budgets are connected, White said.

“The governor built his budget on federal aid, billions of dollars of federal aid,” she explained, referring to federal COVID relief funds. ”To the extent he does not get that revenue, they are allowed to push down to us, to counties.”

That could mean another $20 million in lost funding. 

The state is already holding back on payments to the county “for their own cash flow needs,” White told the legislative committee.

Normally, the county would have received $24 million from the state by now but so far has received only $15 million, she said.

And unlike some other states, New York did not share money from the earlier COVID-19 aid bill, the CARES act, with counties.

“On the revenue side, we’re taking lots of hits,” she said. “But right when COVID began, we began taking steps to mitigate that.”

Those steps included holding jobs vacant for a net savings of $3.1 million and a voluntary furlough program earlier this year for two months saved $275,000.

“We project to offset by about $10 million to $15 million,” said White.

Currently there are two new competing COVID-19 proposals in Congress. One, the HEROES Act, is $3.5 trillion and the other, the HEALS Act, is $1 trillion, White said.

“We hope they meet in the middle and we do hope that includes direct funding to counties of our size,” she said. “That’s what we really need.”

The HEROES Act passed by the Democrats in the House provides direct funding to counties the size of Dutchess. The HEALS Act proposed by Senate Republicans provides no additional local money but allows states to share unspent CARES Act money with counties.

White’s summary was simple.

“Really everybody is waiting for federal aid,” she said. “Depending on what that federal aid is, will determine a lot of what the state budget looks like and a lot of what our budget is going to look like.”

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