Hits: 455
WPCNR QUILL & EYESHADE. By John F. Bailey. Based on Statistics From the New York State Department of Taxation and Finance. July 29, 2020:
The Covid-19 virus dealt a blow to the White Plains economy in June, as expected.
Sales tax revenues were down $3 Million to $2,381,120 compared to the $5, 047,352 in June 2019. The $2,666,232 decline meant the economy in White Plains declined 52%.
The Sales tax
revenues for 2019-20 fiscal year for the City of White Plains was $47,714,688, down from $50,115,543 last year. The $2,400,855 decline
is 4.8%. The city budgeted that decline
into their adopted 2020-21 budget, cutting their expected sales tax revenue
$2,700,00 in the new budget just begun, thanks to their policy of never
budgeting more than they collect the previous year in sales tax revenues,
The worry that the city faces is how fast sales tax revenues
will rebound to the averaged $4 Million plus a month to put the city back up to
the $50 Million a year number and more. Will July bounce back? Will August boom
with back to school sales (if we go back to school) ? Will internet sales be
fully accounted for by the state by municipality?
The city also faces the disasterous renovation of the Ritz
Carlton, which means a big slump in hotel tax. The city budget for 2020-2021
predicts a $600,000 slump in hotel taxes. Hopefully the “ever booming” real
estate market, if you believe realtor news releases, may save further deficits.
If you are budgeting for next year, the city may have to
consider at least a 6% property tax increase to make up the 4.8% (at present
rate) Covid-19 related decline to maintain city services and anticipate furture
wage increases. Ironically, the approximate 5% decline is exactly the amount
the city transfers into the Taxpayers Relief Fund, which funds annual payroll
increases. That $5 Million or so has to
come from somewhere if the White Plains economy fails to recover quickly the
next three months.
White Plains because it does not wildly expand its budgets
on wishing and hoping, always appears ready to whether the interim financial
challenges that come along, instead of anticipating financial futures that may
never happen. The delay in starting a half dozen apartment complexes in the
downtown in White Plains due mainly to financing problems developers are facing
as well as delay in developing the city parcels adjacent the Metro North
Station upgrade is an example of how conservative planning in White Plains
budgets spares White Plains the pain that cities, towns and villages in
Westchester face in the months ahead.
The city does not have to make cuts in this new budget yet,
but they may want to consider using their fund balance to correct the sales tax
covid-related shortfalls if the recover such as it already is continues as it
is. Capital projects also could be delayed. But with a new round of labor
negotiations coming up, the city development has got to get rolling. Those
apartments cannot open soon enough.