The coronavirus pandemic has blown a hole in Monroe County’s budget ranging from $68 million to $122 million, County Executive Adam Bello warned on Thursday.
At its worst, the deficit would account for roughly 10 percent of the county’s $1.2 billion spending plan for the fiscal year ending Dec. 31.
The county has spent roughly $10 million responding to the pandemic, but expenditures like that are not to blame for the shortfall, Bello said. Much, if not all, of those expenses, can be covered by the $129 million in federal aid that the county received through the CARES Act.
The issue is revenue. The county is projecting massive shortfalls in several areas, particularly sales tax revenue and state aid.
“Issues such as budget cuts and furloughs are tough conversations, and they’re conversations that we have to start having,” Bello said. “But these decisions are going to be made as we continue to get more data on the impact and information on what we can expect from the federal government in terms of aid.”
Bello noted that states and municipal governments across the country are going to need more direct aid. He also drew attention to legislation sponsored by House Rep. Joe Morelle that would allow counties more flexibility in how they use CARES funding. The legislation “would greatly impact counties like Monroe and our ability to square our budgets,” Bello said.
Morelle said in a brief text exchange that his legislation would “allow counties to have revenue shortfalls be included in the definition of ‘allowable expenses’ under the CARES Act.”
Asked specifically about whether he would consider raising property taxes to plug the gap, Bello did not rule out the option. “You can’t tax your way out of a $100 million problem,” he said.
But, Bello added, the county could also not afford to cut social services programs that make up half of the budget and are in greater demand right now.
Republican county legislators seized on Bello’s unwillingness to rule out raising taxes in a statement from Majority Leader Steve Brew that said his caucus would not support a tax increase.
“Monroe County has been continually behind other counties across the state in facing the fiscal challenges of this crisis,” Brew said. “We cannot rely on the federal or state government to balance our budget. The wait-and-see approach proposed by County Executive Bello will only deepen the fiscal hole.”
As Bello outlined the county’s expected shortfalls, he noted that the numbers he shared were projections and that county officials will have a clearer picture of the bottom line in time. Bello pointed to May 11, when April’s sales tax figures are expected to come in.
The projections now include:
- A $35 million to $60 million shortfall in sales tax receipts, which were budgeted at $158 million.
- A $2 million to $5 million shortfall in hotel-motel tax revenues, which were budgeted at just under $9 million.
- An $8 million to $14 million shortfall in fees, which were budgeted at $27.4 million.
- The loss of $3 million in sales tax that was “intercepted” by the state for a fund to help fiscally distressed hospitals.
- A $20 million to $40 million loss in state aid, which was budgeted at $195.6 million.
Added together, those items make up the projected shortfall. Bello said county officials “are still too early in the process to tell where this will go.”
“I am an optimist by nature, but we still have to operate in the real world, which is why we put these projections together and we’re going to start planning for the worst,” Bello said.
Jeremy Moule is CITY's news editor. He can be reached at jmoule@rochester-citynews.com.
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