The COVID-19 public health crisis led to an economic crisis, according to New York State Assemblyman Fred W. Thiele Jr. Early on, in anticipation of the fiscal predation of the required shutdown, the assemblyman, along with State Senator Liz Kreuger, proposed legislation designed to ease the burden on local municipalities and school districts. Local municipalities have borne the financial brunt of pandemic, as lawmakers labored to continue to provide services and pivot operational methods during the shutdown and beyond.
Signed last week by Governor Andrew Cuomo, the legislation offers municipalities a bit of breathing room.
Mr. Thiele said he expected schools will use the tools in the bill most, given the potential loss of state aid and the costs of preparing to open schools. He believes Suffolk County, where County Executive Steve Bellone has repeatedly described the pandemic’s fiscal impact as “catastrophic,” can also benefit.
Assembly bill 10492 provides flexibility in that it extends the “roll over” period for bond anticipation notes issued between 2015 and 2021. The Legislature enacted similar extensions of the maximum maturity of BANs issued in 2004 and 2005, in response to the 2008-2009 economic downturn, and in calendar years 2007 and 2008, following Superstorm Sandy, Mr. Thiele explained in a release announcing the governor’s signature.
Still more flexibility comes in the form of a provision in the law that allows municipalities, including school districts, to spend money from capital reserve funds without undergoing traditional referendum requirements. And, if operating funds are needed to cover COVID costs, the municipalities and schools can temporarily advance money from their reserves, with extra time to pay it back. Typically, advances must be repaid before the close of the fiscal year during which the advance occurred. The legislation allows an extra year.
“As the Assembly chair of the Local Governments Committee, I am proud to have sponsored this legislation to provide our local governments with the flexibility they need to continue to effectively operate,” Mr. Thiele said last week. In an email to The Press on Monday, he added, “Local governments and school districts face fiscal challenges due to COVID-19. If there is not federal aid from Washington for state and local governments, the situation could become even more dire. This legislation, which has been authorized before, after 9/11 and the Great Recession, provides a tool for local governments to protect taxpayers from loss of services and tax increases by permitting them to extend the rollover period on bond anticipation notes and providing them with increased temporary flexibility to use reserve funds and make inter-fund transfers to fund COVID related expenses.”
New York State Comptroller Thomas P. DiNapoli praised the passage of the law in a release, stating, “Local governments across New York are facing dire financial consequences from the coronavirus global pandemic as sales tax revenues shrink and state aid is in jeopardy. … This legislation, proposed by my office, will help ease the burdens they will face until our economy fully recovers.”
Peter A. Baynes, executive director of the New York State Conference of Mayors (NYCOM) added, “This package of local fiscal flexibility measures will help city and village officials work their way through these extraordinary fiscal times without unnecessary reliance on the property tax.”
Mr. DiNapoli also created an online COVID-19 Financial Survival Toolkit to help New York’s residents, government entities, nonprofits and businesses alike as they navigate the pandemic. The page offers resources and links to provide access to vital assistance and information, at osc.stat.ny.us.