Decreasing Revenues During The Pandemic Are Leaving NY’s Local Governments Strapped; Dedicated Federal Funding For Local Communities Would Provide Necessary Relief On Lost Revenues, Increased Costs And Avoid Local Tax & Fee Increases And Layoffs

Reps Say All NY Counties, Small Cities, And Towns Need & Deserve $ To Maintain Vital Services, Workers And To Recover 

Reps: Funding Would Be The Shot In The Arm Local Governments Need To Recover From The Pandemic And A Critical Piece Of A Larger State & Local Relief Package

U.S. Senate Democratic Leader Charles E. Schumer, U.S. Senator Kirsten Gillibrand, U.S. Congressman Antonio Delgado, and U.S. Congressman Lee Zeldin today announced new legislation, the Direct Support for Communities Act, which provides local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the COVID-19 emergency. This local assistance would complement critical relief that states also require in this crisis, which the representatives are simultaneously aggressively pursuing.

The representatives are concerned about the layoffs of public health care workers, firefighters, police, sanitation workers, teachers and other vital public servants in New York, and are fighting to ensure that all counties, cities, towns, and villages, regardless of size, have the financial resources necessary to continue to provide these necessary services and to avoid local tax and fee increases that will put more burden on already cash-strapped families and businesses in this crisis.

“Local governments are hamstrung trying to deal with lost revenue and mounting costs in the face of the pandemic,” said Senator Schumer. “Under our proposal, counties, cities, towns, and villages of all sizes could count on direct, guaranteed financial relief, instead of having to layoff vital workers, cut important services, or raise taxes and fees at absolutely the worst time. Local governments deserve nothing less than our strongest federal support, and I am doing everything I can to get significant and flexible federal aid to our states and local governments included in the next legislative package Congress considers.”

“Our local governments are facing unprecedented financial hardship, as the COVID-19 outbreak has caused costs to surge and revenue to dwindle. Direct federal relief for local governments is absolutely critical as they grapple with the economic fallout from the COVID-19 pandemic. This smart and necessary proposal will ensure local governments have the resources to pay our first responders, health care workers, teachers, and public servants, and can continue serving our communities without raising taxes or fees. I will do everything in my power to ensure that this proposal is included in the next economic relief package,” said Senator Gillibrand.

“Upstate New York is facing an urgent, immediate funding crisis. Our counties and municipalities are laying off employees and the lack of funding going directly into local communities is jeopardizing the livelihood of our first responders, our emergency medical services, cops, teachers and more. We need to provide local government with funding expediently and I am glad to introduce a bipartisan, bicameral solution.” Congressman Delgado said, “this is one of many steps that must be taken to support our rural communities and to make sure that they are able to receive the essential services needed for sustainability during this public health emergency.”

“Our local governments have been on the frontlines in the battle against coronavirus, and they will be critical in finishing the fight on the ground,” said Congressman Zeldin. “In light of historic, enhanced budgetary shortfalls caused by this ongoing outbreak, we must ensure our local governments have the direct funding they need to recover fiscally. This bipartisan proposal helps deliver vital funding to counties, towns, cities and villages of all sizes so that we can ensure our communities emerge on the other side of this outbreak stronger than ever.” 

“On behalf of the local governments, we commend Senate Leader Charles Schumer for standing up for the New York State and local taxpayers in the face of great adversity. Senator Schumer understands the severity of this public health crisis and the economic impact it is having on state and local government.   County governments, as regional entities, are facing a potential loss of billions in revenue directly associated with the COVID-19 pandemic.  Sales tax, tourism and hotel/motel occupancy tax, entertainment revenue from casinos, and numerous other local fees will all see dramatic decreases.  Combined with looming state reimbursement cuts, local governments will be in dire straits and face an unprecedented fiscal storm, at the same time we are on the front lines battling the COVID-19 pandemic. Without critical federal assistance, the fiscal outlook for counties could become catastrophic,” said New York State  Association of Counties Executive Director Stephen J. Acquario. “House Appropriations Chair Rep. Nita Lowey and the House Democrats will release their proposal to provide assistance to state, county and municipal governments.  We also commend Senator Gillibrand, Rep. Antonio Delgado, and Rep. Lee Zeldin for introducing legislation providing direct aid to counties on the basis of population, with all counties receiving an award. This aid is necessary to establish a foundation for the reopening of our communities and county leaders are grateful for the historic leadership of the entire bipartisan NY Congressional Delegation speaking as one voice for the state of NY and all its local governments and we urge swift action by the Congress and the President.”

"The New York State Conference of Mayors thanks Senator Schumer, Senator Gillibrand, Representative Delgado, and Representative Zeldin for their support of a direct funding stream to all local governments,” said Peter A. Baynes, Executive Director, New York State Conference of Mayors. “The allocation mechanism they have proposed will ensure that no community is left behind. Whether big or small, urban or rural, New York's cities, villages, counties and towns have collectively lost billions of dollars in revenue solely as the result of the COVID-19 pandemic. Their local economies cannot restart, much less return to their previous condition, unless the federal government provides the funding necessary to offset local revenue lost by no fault of municipal leaders." 

Under the Direct Support for Communities Act, the local relief fund would be split 50/50, half committed to cities, towns and villages, and half committed to counties:

  • Of the portion allocated for cities, towns, and villages, 70% would go to Community Development Block Grant (CDBG) entitlement communities using the CDBG formula through the Department of Housing and Urban Development (HUD) to allocate the funding. 
  • The remaining 30% for cities, towns, and villages would be send to states, which would be required to sub-allocate the entire amount within 30 days to all non-entitlement communities in the state based on population.
  • The portion of emergency fiscal assistance for counties would be allocated across all counties based on population. The exception to that formula is that a current CDBG entitlement county would receive its entitlement amount if it is higher than what that county would receive under an allocation based on population.

Local governments would be able to use this federal relief to help address costs associated with lost revenues and response to the pandemic, in an effort to help avoid cuts to essential services and local tax and fee increases. This proposed formula for local fiscal relief is intended to be incorporated into a larger legislative package that will also include significant fiscal relief for state, local, and tribal governments; retroactive availability to use the Coronavirus Relief Fund in the CARES Act for lost revenues; and other important matters.


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