New York facing harsh financial picture
The Governor’s Executive Budget outlined this past week offers a stark and sobering look at the year ahead for New York State. There are essentially two scenarios: one bad and one worse.
In the wake of the COVID-19 response over the past ten months, New York state faces a $15 billion deficit this year. Tax revenue is down dramatically statewide due to business shutdowns and job losses. At the same time, expenses rose as the state scrambled to respond to the pandemic with providing personal protective equipment, reopening protocols and communication, testing, and now vaccine distribution. Over the next four years the Governor projects the state will have a $39 billion revenue shortfall.
Two scenarios are outlined in the Executive Budget and each rely on some level of additional federal funding to help close the gap. What the Governor called a “fair funding” plan projects $15 billion from the federal government. The “worst case” scenario would be $6 billion from the proposed state and local aid package. Under either plan, the state will have to make some cuts and seek additional revenue sources, potentially from legalizing recreational marijuana and online sports betting. Those two items alone are projected to provide $750 million in revenue for the state budget, which still leave a significant deficit in the state coffers.
The Governor is also calling for the repeal of the 2017 cap on SALT – the State and Local Tax deduction. The Tax Cuts and Jobs Act of 2017 capped the deduction at $10,000. An analysis by the New York State Department of Taxation and Finance shows that New Yorkers’ federal taxes have increased by up to $15 billion annually as a result of the cap, and that the state’s highest earners have moved homes and businesses to other states because of the cap.
New York State businesses and residents are unquestionably already taxed substantially. Any increases at this time would be a further hardship on our already challenged economy. All state and municipalities have been burdened financially in the past year by pandemic losses and expenses. The federal government must reach an equitable solution for funding state and local governments and providing meaningful relief. We will also point out that this is a time for all levels of government to redouble their efforts to seek opportunities for shared services, mergers, and regional partnerships in an effort to save on expenses.
We don’t envy our lawmakers as they begin budget deliberations in the weeks ahead. There are no easy answers to resolve the extraordinary circumstances currently facing our economy or our fiscal stability. Many businesses and families know this first-hand as the public health crisis continues.
CHAMBER AND MAST MARK MILESTONES
The Chautauqua County Chamber of Commerce and Manufacturers Association of the Southern Tier observed milestone anniversaries during a joint Annual Meeting last week. The countywide Chamber is 20 years old, while MAST is now 120. The two local business organizations had been planning a celebration to highlight their years of service to the community but moved to an online event instead when it became clear that COVID restrictions would not allow for an in-person program.
Chamber Board Chair Fred Johnson noted that the organizations both sprang to action in 2020 as businesses needed clear and concise direction for navigating a new maze of health and economic challenges. “Our boards were meeting weekly. We knew it was the right thing to do and we knew we had to provide whatever support we could. We launched an online shopping site for local businesses, which has already been a success, and will continue to grow. We will continue to look for ways to partner with organizations to make a difference for local businesses.”
Rhonda Johnson, out-going MAST Board President, noted, “our local manufacturers have stepped up to meet the challenges head-on. Through supply chain troubles and staffing issues and more, it is our creativity and commitment that has made a difference in the past year. We will continue to see more of that in this resilient community.”
Keynote speaker, Lt. Governor Kathy Hochul, said, “We can all be proud of our state and our region for stepping up. Our business community, especially here in Chautauqua County, is tough and flexible. I congratulate the Chamber and MAST for helping all local businesses in a time of great need and am proud that they will be here going forward to continue that great work.”
The Chamber presented the 2020 Pam Lydic Coalition Builder Award to Mike Abbate, a former Plant Manager for Cummins Jamestown Engine Plant. He was recognized for his volunteer efforts in the community and most recently the help he provided to help local food distribution sites create a cohesive distribution and data plan in the wake of business and school shut-downs last year.
Chamber Board members installed for 2021 were Chair Fred Johnson of Johnson Estate Winery; Vice Chair Matt Churchill of Water Street Brass; Treasurer Heather Brown of The Resource Center; Secretary Emily Reynolds of Cornell Cooperative Extension Chautauqua County; Immediate Past President Brian Bugaj of Nestle Purina Petcare; Robert Manning of Mannings Fireside Manor; Kris Maytum of DFT Communications; new member Kris Sellstrom of the Jamestown Board of Public Utilities; and representing the Community Chambers; Dunkirk, Ellen Luszkowizk of KeyBank; Fredonia (to be announced); Hanover, Rick Klisiewicz of Silver Creek American Region; Jamestown, Vicki McGraw of Elegant Edibles Catering; Mayville-Chautauqua, Sally Andriaccio of Andriaccio’s; and Westfield-Barcelona, Fred Johnson.
MAST Board members elected were President Dale Gier of Producto Corporation; Vice President Eric Livengood of Ulrich Planfiling; Second Vice President Chase Churchill of Jamestown Electro-Plating; Treasurer Chris Napoleon of Napoleon Engineering; Immediate Past President Rhonda Johnson of Weber Knapp; Chris Anson of Lakeside Precision; Daniel DeMarte of Jamestown Community College; Anna Dibble of Cummins; Mike Evans of Bush Industries; Chris Lanski of Exelco; Randy Manitta of Hope’s Windows; John Stahley of Siemens-Dresser Rand; Jim Stitt Jr. of Cutco; Rick Turner of Blackstone Advanced Technologies; and Paul Zebraski of Nestle Purina Petcare.