October is a month when people go looking for scares.
Haunted houses, horror movies, spooky songs – the days leading up to Halloween are filled with fun frights and eerie thrills, with supernatural terrors and blood-curdling chills.
They’re also filled with numbers – with tax rates and revenue projections, with spending increases, or cuts.
This is the time of year when municipalities throughout the state unveil their budgets for the upcoming year, giving residents a window into their overall fiscal health.
If you’re looking for scares, this is where the real terror lies – in the spending plans, soon to be unveiled, that will reveal just how much towns, cities and counties are suffering as a result of the pandemic and resulting economic downtown.
Up until now, news reports have hinted at the fiscal turmoil already roiling communities.
During the summer, Schenectady opted to borrow $7 million to cover payroll costs and other functions through the end of the year, but the city is still facing a significant budget deficit that will need to be addressed.
We’ll learn more about how Mayor Gary McCarthy intends to deal with the gap on Thursday, when he releases his budget for 2021, but I’d suggest steeling yourself for the bad news now. The hope has always been that the federal government would bail out struggling municipalities, but a bailout appears unlikely.
In other words, it’s going to get worse before it gets better.
Tax hikes, layoffs and cuts to municipal services – all of these things will be on the table as cities try to navigate the perilous financial terrain in which they’ve found themselves.
In July, New York Comptroller Thomas DiNapoli issued a grim report, titled “Under Pressure,” detailing the revenue challenges confronting local government.
Like anything COVID-related, the picture painted by DiNapoli isn’t pretty.
“The effect on the bottom lines of New York’s local governments from the loss of these revenues will be profound,” DiNapoli writes. “Without substantial help from the federal government, many local governments will likely be forced to make painful cuts to services, even if they have no additional costs for providing new services related to COVID-19.”
Particularly devastating has been the sharp drop in sales tax revenue, which declined a staggering 27.1 percent between April and June, down $1.2 billion from the same period the previous year. Between March and August, local governments received $1.5 billion less than they did during the same span of time in 2019.
It’s only a matter of time before the economic crisis engulfing cash-starved municipalities throughout upstate New York becomes tangible, in the form of cuts to city programs, layoffs and increased taxes and fees.
That’s a scenario that might have seemed unlikely just a year ago, when McCarthy was touting a spending plan that contained a small tax cut, increased funding for parks maintenance and $2 million for the mayor’s signature Smart Cities initiative.
It’s a budget from another world, one happily oblivious to the calamities that would unfold in 2020.
This year’s budget will be forced to reckon with those calamities, and if that doesn’t scare you, nothing will.
Reach Sara Foss at [email protected] Opinions expressed here are her own and not necessarily the newspaper’s.