Comptroller says local governments are starting to rebound

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NYS Comptroller DiNapoli (center).File photo.

ALBANY – State Comptroller Thomas DiNapoli has launched his new online tool to monitor spending of federal recovery aid and COVID-19 relief programs in the state, including funds for excluded workers, childcare providers, emergency rental and homeowner assistance, and small business recovery.

DiNapoli also released the results of a study of three Hudson Valley municipalities and their spending during the pandemic.  The finances of the City of Peekskill, Town of Cornwall, and the Village of New Paltz were examined by staffers of the Office of the State Comptroller.

The three case studies showed revenue losses and employment and service reductions due to COVID-19’s effects. As they approached their 2021 budgets, all three entities were faced with the challenge of restoring pre-pandemic service levels while remaining fiscally solvent, without knowing whether revenue sources would remain depressed, according to DiNapoli’s office. 

As a result of the losses, all three governments considered some mix of appropriating a portion of existing fund balance (“rainy day funds”) and raising revenues such as property taxes or water rates. 

“In general, our analysis found the primary fiscal impact of COVID-19 on these three local governments during the period was in the form of revenue losses. These included the loss of revenues from parking charges, water bills, sales tax collections, and court fines,” according to DiNapoli.

The comptroller’s office credited the local governments with their ability to monitor expenses to offset pandemic-triggered revenue losses in order to avoid deficits.  DiNapoli said “They carefully monitored their budgets during the year to ensure that they were able to reduce spending in some areas when revenues came up short or spending on overtime grew and budgeted conservatively for the upcoming year in the face of uncertainty.”

The arrival of federal assistance from the American Rescue Plan (ARP) began arriving this past summer and DiNapoli says it should allow local governments to continue operations without further disruptions such as layoffs and service reductions, while possibly making it feasible to undertake projects that will speed the pace of recovery.

“My office is committed to full transparency in government spending,” DiNapoli said. “New York has received an historic level of federal funding to weather the COVID-19 pandemic. This has helped stabilize state and local government finances and allowed for greater investments in programs to assist New Yorkers in need. My office will follow the money to ensure federal funds are getting where they are supposed to go and being spent in smart and efficient ways to help New York’s recovery.”