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.