New York State local sales tax collections declined by 10 percent (or $1.8 billion) in 2020 compared to 2019, due to the economic impact of the COVID-19 global pandemic. New York City, which was hit earliest and hardest by the pandemic, saw its collections decline by 18.7 percent in 2020, while counties outside the City saw an average drop of only -0.9 percent.
Local sales tax collections in New York State grew by 49.2 percent, or just over $1.6 billion, in the second quarter of 2021 compared to the same period last year, a dramatic increase from last year’s weak collections during the first wave of the COVID-19 pandemic. Even so, when compared to pre-pandemic levels, the second quarter of 2021 was still strong – up 8.7 percent, or $396 million, above the same period in 2019.
Local government sales tax collections in August increased by 15.5 percent, or $204 million, over the same month in 2020, making it the fifth month in a row that collections exceeded 2020 results. The double-digit growth in local sales taxes reflects the fact that collections during August of 2020 were fairly weak as sales activity was recovering in certain parts of the state from the early effects of the pandemic.
This report summarizes data for fiscal year 2019, the most recent data reported by IDAs through the Public Authorities Reporting Information System (PARIS). The report also contains a brief discussion of local development corporations (LDCs), a related type of local authority. | Interactive Map
The case studies described in this report provide insight into some of the fiscal challenges that the COVID-19 pandemic presented to individual local governments in 2020. OSC staff conducted interviews and financial analysis in late fall 2020, choosing the Mid-Hudson region as the geographical focus. The City of Peekskill, the Town of Cornwall and the Village of New Paltz agreed to participate in the study. Each had its own unique experience in 2020, but each also shows some of the typical problems facing local governments throughout the region and the State.
Local sales tax collections totaled $5.2 billion in the third quarter (July-September of 2021), up $861 million (20%) from the same period last year and continuing the trend of exceeding pre-pandemic levels.
The COVID-19 pandemic wiped out years of growth in New York City’s office sector. Stay-at-home orders forced many office workers to shift to remote work, as businesses reliant on in-person interactions with customers were forced to reduce capacity or remain closed for extended periods. As a result, in City Fiscal Year 2022, the full market value of office buildings fell $28.6 billion, the first decline in more than 20 years, and property taxes declined more than $850 million.
Local government sales tax collections in July increased by 21.2% over the same month in 2020, marking the fourth consecutive month that collections exceeded 2020 results. Collections totaled close to $1.6 billion, up $276 million from July of last year.
Personal income in New York State has surpassed pre-pandemic levels; while this is a positive development, there are two causes for concern. First, growth is primarily due to transfer receipts paid to New Yorkers from the government, which account for more than 20 percent of personal income. Second, earnings in seven industrial sectors, including the leisure and hospitality sector that was hardest hit during the pandemic, have not yet returned to pre-2020 levels.
The COVID-19 pandemic spurred a change in how people sought and received medical care; rather than visiting medical practitioners in person, increasing numbers of people used telehealth services. While telehealth usage in New York and nationally has declined since the pandemic peak, it remains well above pre-pandemic levels, though still only a small share of overall utilization.
