SARATOGA SPRINGS -- In a worst-case scenario, the city of Saratoga Springs could be looking at a revenue shortfall of as much as $16 million for the year because of the coronavirus' impact, city Finance Commissioner Michele Madigan said Thursday -- but she expects the city to be able to continue to provide essential city services.
The city has a $48.7 million budget, relying on revenue sources that include sales tax, room occupancy tax, state aid and various permit and event fees, all of which are at risk. "I'm expecting all our revenue to decline, to be honest with you," Madigan said.
Sales tax revenue is certain to take a major hit from the business closures tied to the fight against coronavirus. Madigan said she knows of a city business that was unable to make its March sales tax payment, even though the owner had never missed a payment in 30 years.
Gov. Andrew M. Cuomo implied on Thursday that state aid payments could also be cut, since the state is facing its own revenue crisis. Cuomo said the state's revenue shortfall could be $10 billion to $15 billion, and one strategy might be adjusting state payments to reflect actual revenue results through the year.
"At this time we are considering a scenario of a $7.8 million loss of revenue for the first half of 2020, occupancy tax will be down," Madigan said in a statement on the city's financial condition. "It is harder to judge through year-end, but we may be facing a total 2020 revenue shortfall of $16 million. This scenario equates to a 33 percent shortfall in 2020 revenue."
Madigan said the city has some resources for managing through a financial crisis, and no immediate plans to make budget cuts. "We are planning to manage through this loss of revenue -- and we are well positioned to do so," she said.
"The city of Saratoga Springs is fortunate to have a healthy financial foundation as we face the COVID-19 pandemic," she said. "The city's economy is based on a diversity of sources, many of which are closely tied to tourism, entertainment, social activities, and our yearly racing season. We have been assessing our revenue, expenditures, and cash on hand as well as various fiscal tools available to the city based on near term, long-term, moderate and severe outcomes."
Circumstances are changing daily, she noted, so the city is proceeding with caution. "We will not make rash decisions, and we remain confident that we can manage through this crisis while minimizing disruptions to essential city services," Madigan said.
The city has options including available cash, money in reserve accounts, short-term or long-term borrowing, and sharing services with public or private partners.
"It is too soon to determine what combination of these efforts will fit our needs," Madigan said. "But it is not too soon to state that all options will be considered very carefully, against the sustainability of the city government, the needs of our taxpayers, and most importantly, the health, safety and welfare of our citizens."