OBSERVER File Photos County Executive PJ Wendel (left) and Dunkirk Mayor Wilfred Rosas face grave questions about their budgets due to expected aid cuts.

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, local 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.

OBSERVER File Photos County Executive PJ Wendel (left) and Dunkirk Mayor Wilfred Rosas face grave questions about their budgets due to expected aid cuts.

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.”

In Dunkirk, Mayor Wilfred Rosas is concerned about the sales tax revenue shortfall. “In our budget for 2020 we budgeted close to $3 million. But we’re projecting that we’re going to come very short, could be 50% and if that’s the case, on that line (in the budget) alone we’re going to be short over $1 million already,” he said.

Staffing is another issue the city will have to deal with. “Without looking at the expense side of the budget, where we have already incurred many expenses due to COVID-19. We had plenty of staff members that were deemed as nonessential who have been pretty much sent home, but still receiving a full paycheck. We are looking at making some necessary adjustments to the way that we’re operating to try and minimize the shortfall at the end of the year,” said Rosas.

In Jamestown, comptroller Joseph Bellitto 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.”

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.”

Local mayors and town supervisors are all focused on the expected shortfall in sales tax revenue as a result of the shutdown.

“Sales tax, I think the revenue from sales tax is going to be down,” said Busti Supervisor Jesse Robbins said. “Maybe not this quarter but for sure the next quarter.”

It will take some time for local governments to react to proposed cuts at the state level, which could include school property tax relief, special education, infrastructure funding and children’s health insurance.

“Our budget is passed, it passed before this all started,” said Mayville Mayor Ken Shearer. “I haven’t seen what they are going to cut or where they are going to cut. Until they tell us that I can’t really make a decision.”

Shearer noted that there is nothing unexpected about New York state running short of funds.

“That is nothing new, the state is always short on money,” he said. “I’ve heard that story since long before I was in office. It is always in the back of your mind when you are doing budgets and everything else but you don’t get to choose what the state is going to do. You go with what they give you and go from there, that is all any of us can really do. We can ask and lobby for stuff, but the bottom line is we are a small area of the state and unfortunately many times fall off the governor’s radar.”

Shearer and others in local government have already taken steps to curb discretionary spending, but staff cutbacks are another matter.

“We don’t have any nonessential people, and if you are a municipality with nonessential people you shouldn’t be having them, is my opinion. We don’t have anybody to cut,” Shearer said.

“We have a village to run and services to provide, we’re not cutting any services. But as far as trying to control spending and stuff, maybe we won’t buy a new truck tomorrow that we planned on buying.”

One area where state cutbacks could have a direct impact is the Consolidated Local Street and Highway Improvement Program (CHIPS), which is often used for highway and road repairs.

“We know we are going to have a shortfall obviously in sales tax revenue. We have yet to hear anything about the governor holding off on the CHIPS revenue funding stream for our highway department,” said Patrick McLaughlin, Ellicott supervisor. “Those are funds that every highway department in the state relies on, especially this time of year to help get roads repaired for the winter time and to prepare for what their summer plan is for highway repairs.We kind of anticipate that the governor will say that this year there will not be any. What we have to prepare for at that point is that the plans of repairing certain roads, resurfacing or whatever, we just won’t be able to do that. That’s all there is to it.”

Cuomo has discussed the possibility of using federal stimulus money to supplement the proposed cutbacks to local municipalities.

“We all know that the governor said they anticipate a $15 billion shortfall in their budget. So it’s got to come from somewhere and obviously they are going to start reducing any aid to local governments, towns and cities,” McLaughlin said. “Everything is on the table at this point.”

Despite the difficult financial situation, there is the potential for future improvement in response to the crisis.

“Temporary inconvenience for a permanent improvement. That is kind of my motto,” said Robert Yates, North Harmony Supervisor. “I honestly believe that when we come out, when we get done with this, I think we’re going to see some changes that are going to be for the good. We’ve proven a lot can be done with little to next to nothing.”