Long Island – We will Get Through the Coronavirus If We Act Now

Suburban Long Island’s two counties, Nassau and Suffolk, are neighbors to New York City that is currently the epicenter of coronavirus crisis in the United States and the world. Shuttered businesses and social distancing are currently in effect to minimize the spread of the virus. These practices will remain in place for the next month and potentially longer.

Covid-19 carries with it both demand and supply side destruction. Demand for travel, tourism and economic spending will decline significantly; however, when millions of people can’t go to work, supply side chains are impacted and trade shrinks. Economic losses will be substantial.

The largest revenue source for both Nassau and Suffolk counties is sales tax. Sales tax revenue is an economically sensitive tax and the coronavirus will significantly impact collections Budgeted sales tax revenues for the two counties in 2020 totals over $2.7 billion, representing 60% of all general fund revenues.

The chart below shows the impact to Nassau and Suffolk budgets by declining sales tax collections:

Declines of 10% to 30% in sales tax receipts results in revenue shortfalls ranging from $273 million to $819 million in the two counties.

Nassau and Suffolk counties have been faced with recessions and crises before; the two most recent being the Great Recession of 2008-2009 and Superstorm Sandy. Sales tax revenues from 2007 – 2009 in the two counties declined over $170 million as a result of the Great Recession.

Superstorm Sandy in 2012 was a historic tragedy that wreaked havoc in New York State. A federal funding investment in excess of $17 billion, however, strengthened and made the State’s infrastructure more resilient. On Long Island, the Bay Park Sewage Treatment Plant was awarded more than $800 million in federal grants for repairs and upgrades including an 18-foot high seawall. With substantial beach erosion from the storm, Federal aid of $700 million was earmarked for 83 miles of the eastern Long Island coast.

New York and the Long Island region will suffer great human and economic hardship from Covid-19. It is critical that New York’s elected officials act swiftly to clearly identify losses and receive essential federal funding for individuals and businesses from the recently enacted $2 trillion coronavirus stimulus bill. The agreement provides $150 billion for state and local governments, with $8 billion set aside for local governments.

Long Island has seen its way through numerous crises in the past. It’s time once again to stay strong and navigate through the upcoming uncertainty.