Westchester County Executive George Latimer has told the Business Journal that the county’s finances, like those of other governments, were in freefall as a result of the COVID-19 crisis. Now, Latimer has given a glimpse of just how serious that freefall is by announcing an immediate budget cut of $21 million to begin dealing with the situation.
Latimer estimated the county’s lost revenues could be somewhere between $90 million and $160 million due to the pandemic. The county’s 2020 budget is $2.1 billion.
“We have lost already in a very short period of time a significant amount of revenue from the various sources that the county has in revenue,” Latimer said. “We are estimating at this moment in time that we will have somewhere between a $60 million loss and perhaps as great as a $125 million loss in revenue from sales taxes. That’s a huge amount. We also are going to be losing a significant amount of money from the hotel occupancy taxes. Hotels are practically empty at this stage of the game. That could be as much as a $10 million loss to the budget. That’s on the front-end side.”
Latimer said that the county took action to secure the Bee-Line buses by roping off the front area so the drivers would be isolated and gave up the ability to collect fares.
“That too will cost us bus revenues which we would otherwise have in order to fund what we’re doing,” Latimer said. He did not have a specific dollar amount that would be lost but expected it to be in the millions.
Fees normally earned through the county’s parks, pools and golf courses would be lost as well as funds normally received at Playland. He said the losses could be $5 million to $6 million.
Latimer has developed a plan called “Westchester Forward” to address the financial crisis.
“We are going to make moves now to reduce the amount of spending in our county budget to try to deal with the loss of revenue. Our first phase of activities involves changing policies that I purposefully put into the 2020 budget as an effort to stabilize our fiscal situation,” Latimer said.
He’s beginning by reallocating $10 million that had been planned to go toward the county’s reserve fund. He said the county will issue bonds to cover certiorari payments, property tax refunds that have been won by taxpayers who challenged assessments. He estimated the county would preserve about $6 million in cash by floating bonds to cover those refunds. He said that the county also will issue bonds to cover the cost of its annual pension fund contribution.
“The rainy day has come; it’s actually a fiscal monsoon that has arrived,” Latimer said. “The shutdown of business should be apparent to all. People are not out there buying; they’re not out there spending money.”
Latimer said that how bad the financial situation gets will depend on how long the COVID-19 pandemic lasts.
“We do not yet impact the county workforce or the county contractual relationships with these decisions,” Latimer said. “However, everything is on the table. There is no way we can be sure that we can close this gap within our own resources unless we put every possible item of spending on the table.”
Latimer said that he’s expecting there to be a phase two and a phase three of cuts. He said that some things will not require approval of the County Board of Legislators while some will and he intends to work with them.
“This is a fiscal disaster. It’s going to be fiscal disaster for your town, for your village, for your city, for your school district, maybe for your fire district,” Latimer said. “It’s going to be a disaster for the small businessman who wants to reopen his business and doesn’t know how he’s going to do it, with what kind of cash, with what kind of employee base. It’s a disaster for individuals. If they’re out of work for an extended length of time how are they going to meet obligations and payments they have to make?”
Latimer said that the federal government will have a role to play in helping bring fiscal solvency back to local governments. He expressed a belief that no previous county executive has faced a fiscal crisis quite like this one but he is in the job now and, therefore, accepts the responsibility for finding away out of the hole while prioritizing the health and safety of the population.
