State Comptroller Thomas DiNapoli, at Ulster chamber of commerce event, warns of steep aid decreases
May 19, 2020
State Comptroller Thomas DiNapoli on Tuesday warned that a billion dollars in state aid will be held back due to revenue drops from the business shutdowns intended to slow the spread of COVID-19.
The comments were made during a video conference that was part of the Ulster County Regional Chamber of Commerce "virtual" breakfast.
DiNapoli said the there will be delays or cuts to planned reimbursements for grants and assistance at most levels of local governments and education.
“That will include money that had been scheduled to private colleges, revenue due to some of our counties from the sales of medical marijuana, $370 million in grants that were in the pipeline from some of our upstate cities that were scheduled to be made before the end of May or in June," he said, adding a warning ... "that the school districts should be prepared for a 20 percent cut in school aid,” he said.
“The economic fallout will be more than a temporary impact,” DiNapoli said. “In fact, it will probably face us in 2021-22 as well.”
DiNapoli issued a report earlier this month that found tax revenues to total $75.5 billion for the 2020-21 fiscal year, an 8.9 percent reduction of $7.3 billion over 2019-20. He noted that the revenue figure is $12.4 billion less than had been forecast by Gov. Andrew Cuomo immediately before the COVID-19 concerns began in February.
“When we talk about first-quarter results ... January, February and the first two weeks of March were one picture,” he said. “It was those last two weeks of March, when we got hit hard by this," he said, referring to the coronavirus pandemic, "really what caused the economic devastation.”
DiNapoli added that the forecast shows revenues could be much worse before things turn around.
“We know the numbers are going to be much, much lower,” he said. “It could be 30 percent by the end of June (or) 40 percent. ... We certainly know April was a very, very tough month.”
DiNapoli said contributing factors will include extremely high job loss figures that occurred over a short period of time, which had $9.2 billion paid in unemployment to 2 million state residents.
“You saw in April a loss of 20.5 million jobs nationally, virtually wiping out all the job gains over the past decade,” he said.
“14.7 percent national unemployment, a percentage not as high as experienced during the Great Depression, but what really makes this a challenge so difficult is the Great Depression happened over a period of time,” DiNapoli said. “The economic fallout from the COVID-19 crisis happened overnight.”
DiNapoli said the state is on good fiscal footing but needs to be careful it doesn’t continue going through its fund balance.
“The state ended the fiscal year definitely with money in the bank,” he said.
“At the beginning of this month we had $8.6 billion cash on hand,” DiNapoli said. “That money, though, is being spent ... and at the beginning of this month, we burnt through $533 million. So money’s being spent and May and June particularly are big payout months for the state particularly with regard to school aid.”