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County finances look bad amid outbreak

Reps request federal assistance; Franklin County may borrow, cut services

Local counties are heading into rough financial times as the COVID-19 pandemic has brought on a lack of revenue, increase in costs and slowing of state aid.

“Fighting this virus, all the action forward, basically is on the backs of the counties,” said Essex County Board of Supervisors Chairman Shaun Gillilland, R-Willsboro.

While the state usually takes the lead on emergency responses and executive order enforcement, in this case it is putting a lot of that responsibility on the counties.

“The counties, we’re the biggest loser,” said Franklin County Board of Legislators Chairman Donald Dabiew, D-Bombay.

“It’s bad,” Dabiew said of his county’s finances. “Franklin County’s a very poor county, and we’re going to do everything we can not to raise taxes.

“We’re talking about borrowing money, and hopefully we can make it up down the road.”

He said the county will also likely have to cut services. He said county Treasurer Francis Perry and county Manager Donna Kissane are currently trying to figure out where to cut, and that Perry has been given permission to borrow $2 million.

Gillilland said the county is not furloughing or laying anyone off but will likely have to offer fewer services in the next budget. For discretional programs, he said, “I think everything’s going to be on the table.”

Both county board leaders said the biggest loss has been in sales taxes and occupancy taxes. Both counties rely on tourism dollars from shopping, recreation and hospitality, but with the state on “pause” with stay-home orders, tourism tax revenue is slim.

Gillilland said the sales tax impact on county finances is “immediate” and that Essex County is in a unique position because the largest sector of sales tax it receives is from the hospitality industry.

He said the state is also taking a big chunk of the county’s sales tax for a $250 million, two-year fund in the 2020-21 state budget for distressed hospitals.

The state is also strapped for cash. In its 2020-21 budget, passed during the pandemic, it retained the ability to hold funds promised to counties in grants or contracts, which means that money will likely be slow to come in the future.

Daibew said the state has also considered making these county payments quarterly, which would probably not line up with the county’s payment schedules.

“We need that to survive,” Dabiew said.

On the other hand, Gillilland said the counties are probably burning through money at a slower rate now because they are running fewer operations than usual. Also, he said, Essex County has a healthy fund balance, “thanks to some tremendous planning by Dan Palmer over the last decade,” which will provide a cushion, keeping it from imminent danger. Still, he said next year’s budget will be “pretty ugly.”

Last week the New York State Association of Counties asked the state’s congressional delegation to pass a fourth stimulus bill to provide funding for New York counties, supporting Gov. Andrew Cuomo’s request for more federal Medicaid assistance and unrestricted federal funding.

U.S. Rep Elise Stefanik, R-Schuylerville, said she “absolutely” supports this request and that counties’ number-one concern is the losses in revenue and increasing costs.

“They’ve been, really, at the front end when it comes to their public health departments, of outlaying some of these expenditures,” Stefanik said.

U.S. Sen. Kirsten Gillibrand, D-N.Y., has pitched a similar measure in the Senate, writing a letter with Democratic Rep. Antonio Delgado to the majority and minority leaders of the House and Senate, asking for rural funding in the next relief package.

“Rural communities are at the heart of Upstate New York, and their survival is key to helping our state, and our nation, recover from this devastating public health crisis,” Gillibrand wrote in a press release.

State Assemblyman Billy Jones, D-Plattsburgh, also supports this request, calling on federal representatives to add the funding to any future stimulus package.

“Local leaders are seeing firsthand the impact government and human services are having during this crisis, and we need to be sure they have adequate funding to carry out their missions and pay their employees,” Jones wrote in a press release. “Our businesses have been hit hard, which has unequivocally had an impact on our state and county sales tax revenue, and without additional funding, critical services to our senior citizens, infrastructure, and healthcare may very well be threatened.”

Essex County’s Gillilland said federal stimulus money “is exactly what’s needed” and that it should go directly to counties instead of passing it through the state. He also said the state needs to end unfunded mandates. At the “top of the list,” he said, the state needs to lift Medicaid payments off counties’ backs. He said the majority of his county’s tax levy goes to Medicaid.

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