COVID-19 leads to sharp drop in sales tax revenue

Jun 15, 2020

Among the budget pressures facing local governments is a sharp drop in sales tax revenue related to the coronavirus pandemic.

Credit New York State Comptroller's Office

New York State Comptroller Thomas DiNapoli said that sales tax revenue for local governments fell by more than 32% in May, compared to the same month a year ago. Sales tax collections for counties and cities in May totaled $918 million, or $437 million less than 2019.

“We anticipated that sales tax revenues would continue to drop because of COVID-19, but the May sales tax figures show just how deep it is cutting into municipal finances,” DiNapoli said in a statement. “The federal government needs to step up and provide financial help to states and local governments hit hard by this virus to avoid severe cuts to critical services.”

He said the sharp decline in revenues was widespread across the state.

In Erie County, $42.5 million in sales tax revenue was tallied, compared to around $61.5 million a year ago. That is a nearly 31% drop. In Niagara County, $7.3 million was tallied, compared to $10.3 million a year ago, or a 29% drop.

Rural counties saw an even greater drop: Chautauqua County nearly 36%, Cattaraugus County more than 36% and Allegany County more than 38%.

DiNapoli said that his office anticipated that sales tax revenues would continue to drop because of COVID-19.

Credit New York State Comptroller's Office