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Virus Impact On County, City Budgets Unclear

New York state’s Division of Budget announced it will be forced to cut aid to localities by $8.2 billion because of the economic impact caused by the coronavirus pandemic.

So far, however, Chautauqua County and city of Jamestown officials have received no official word from the state on how much of a cut in state aid they will receive.

County Executive PJ Wendel said officials have only been told that state officials reserve the right to make budget adjustments, and that every 90 days the Department of Budget will readjust the budget accordingly.

“We have not received any information on how much state aid will be cut,” Wendel said.

The county executive said earlier this month he sent a memo to county department heads asking them to reduce their budgets by 15% to 20% in local share. “We’re reviewing ways to cut to get ahead of potential reductions,” he said.

Where county officials will cut its budget to potentially lower services is unknown at this time.

“We are looking at ways to reduce our local share — we’re looking at all services. We’re looking at everything,” Wendel said. “We are doing a department-by-department look at budgets, what is feasible and what is practical. We know we will have to cut. We just don’t know where.”

Joseph Bellitto, comptroller for the city of Jamestown, said city officials have received no official word from the state on how much its aid might be reduced.

“I don’t know if the mayor has received anything from the state Department of Budget or the governor’s office, but I have not,” he said. “We are waiting. I’m definitely concerned. Who knows what (state officials) are thinking. It’s a big unknown at this point.”

Bellitto said city department heads will be meeting Thursday and Friday to discuss its budget.

“We will be looking at things we do now. We are confident sales tax revenue will take a hit, definitely in the second quarter,” Bellitto said. “There’s also less parking ticket revenue, parking ramp revenue and courts are closed, so no fine revenue. We can assume there will be no park-type revenue like ball field user fees.”

During a work session meeting of the Jamestown City Council on April 20, Mayor Eddie Sundquist said city financial officials have estimated the COVID-19 crisis could have a $1 million to $4 million negative impact on the 2020 city budget.

He said unless the federal or state governments provide additional aid to the city because of the pandemic, city officials might be looking at “filling that gap.”

Sundquist said he doesn’t want to lay off city employees, but nothing can be guaranteed at this point.

“We are working very hard to come up with a plan to prevent that,” he said. “We are going to have to make some tough and difficult measures going forward.”

In a news release from the state Department of Budget, state officials predicted the COVID-19 recession will be deeper and the recovery longer than the 2008 Great Recession and the recession that followed the terrorist attacks of Sept. 11, 2001.

Bellitto said the downturn in the economy happened for different reasons during the COVID-19 pandemic and the 2008 Great Recession. He said the recession was the result of an economic issue caused by the subprime mortgages issued by Wall Street.

“It was a true economic problem,” he said. “This is a health problem that has created an economic problem. If things could get back to normal, the economy could come back. Right now, there is no underlying problem with the economy.”

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