HEROES Act

Local governments throughout New York State remain in a holding pattern as they wait for word from Albany on state aid levels and from Washington, D.C., on another federal stimulus bill.

“No update has been received by the Genesee County Manager’s Office regarding state reimbursements of mandated expenses,” County Manager Matt Landers said last night.

Municipalities were expecting to receive an update regarding state funding from Gov. Andrew Cuomo on Sept. 30, one of the governor’s predetermined “benchmarks” to evaluate and inform localities of the impact of the COVID-19 pandemic upon New York’s economy.

Until he hears something different, Landers said Genesee County is “still planning for 20-percent reductions in state reimbursements for both county fiscal years 2020 and 2021.”

The county, towns and fire districts have fiscal years that run from Jan. 1 through Dec. 31.

Villages’ fiscal years run from June 1 through May 31, except Alexander, which runs from April 1 through March 31. The City of Batavia’s fiscal year is also April 1 through March 31.

Landers and officials in other counties have been supported by repeated calls from the New York State Association of Counties for the White House and Congressional leaders to reach an agreement on a coronavirus stimulus package that would provide direct aid to local governments.

NYSAC’s latest plea to pass an updated HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act came on Thursday following its virtual Fall Seminar.

In its press release, NYSAC stated that an analysis of the modified $2.2 trillion HEROES Act -- which was moved by leaders in the House of Representatives this week and is still in the midst of negotiations – reveals that counties across the state would receive nearly $3 billion in federal stimulus.

“Every day that passes without a deal on direct aid to local governments, the deeper the economic hole that is being dug in our communities,” said NYSAC President John F. Marren. “Local governments stepped up and expended great resources to stop the spread of the virus and now, with state aid being withheld and revenue collection down, counties are being forced to cut services and lay off employees, which only depresses the economy further. It’s time for Washington to get behind a plan and get this done for the American people.”

The NYSAC report also indicated that through the Community Development Block Grant program, entitlement communities across New York State -- municipalities over 50,000 in population – would receive about $2.4 billion.

Other, smaller cities and localities, would receive $2.2 billion, and New York City, which has half of the state’s 19 million people, would receive $5.35 billion.

The House’s latest version of the HEROES Act is $1.2 trillion less than what Democrats proposed in May, and includes direct payments to individuals and families, and enhanced unemployment benefits.

The issue of sending funds to states and municipalities is one of the sticking points, but reportedly has the support of the Trump administration in the amount of $250 billion.

U.S. Senate Republicans are calling it the HEALS Act but, in Genesee County Manager Jay Gsell’s opinion, the latest federal stimulus proposal does nothing to cure the wounds being inflicted upon state and local governments.

Hoping that the bill offered on Monday by Senate Majority Leader Mitch McConnell is “dead on arrival,” Gsell took the GOP to task for failing to include funds to help financially strapped municipalities such as Genesee County.

“They just left the realm of local governments and even additional resources for states on the outside with the idea that apparently they want to keep waiting to see what the economy will do … all across the country, not just in New York State,” he said.

The $1 trillion Health, Economic Assistance, Liability protection, and Schools Act, or HEALS Act, is the Senate’s answer to the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, that was passed by House Democrats in May.

Gsell believes the stimulus package (the fifth since the COVID-19 pandemic took hold in March) will likely be the last economic rescue package prior to the November presidential election.

“This Senate bill and the House of Representative bill are diametrical ends of the spectrum … and hopefully (they’ll meet) somewhere in the middle to get bipartisan support in both chambers to get this thing done by August 7^th,” Gsell said. “Once they come back in September, they may put anything else in terms of fed stim off past the election and maybe not even then.”

Gsell said states and local governments are facing significant losses in revenue from several sectors, primarily sales tax, but also from hotel bed tax and gaming distributions. He took exception to a provision in the HEALS Act that calls for the construction of a new FBI building in the nation’s capital.

“It is insulting that there is money in this bill to build a new FBI building in Washington, D.C.,” he said. “Where does that come out with what should be a federal stimulus bill?"

Reportedly, money for a new FBI headquarters was put in the bill at the request of the Trump administration.

“The economic dislocation is still significant. For what happened yesterday, to pretend that that’s not the case, to me is both disingenuous but also shows a lack of understanding of what’s going on with regard to the national economy and what’s going on with local governments,” Gsell said.

According to the latest report from the New York Association of Counties, the state’s counties and New York City could lose up to $13.5 billion in revenue in 2020 and 2021, a situation that could result in cuts to services and permanent layoffs.

NYSAC projects a $4.9-billion loss in sales tax in the next two fiscal years in light of unemployment soaring to 13 percent (up from 4 percent in 2019) as well as an 80-percent decrease in hotel occupancy taxes and the uncertainty surrounding the reopening of gaming sites across the state.

Furthermore, NYSAC forecasts that state reimbursement cuts of at least 20 percent will cost counties outside of New York City more than $670 million a year.

While acknowledging that the NYSAC figures are worse-case scenarios, Gsell said Genesee County officials are “looking at it from the standpoint of what have we experienced so far in the quarters of sales tax payments that we have seen since the beginning of this calendar year” and hope for federal support.

“If the McConnell bill somehow survives, and I hope to gosh it doesn’t, that will engender the State of New York to start doing across the board 20-percent cuts, if even that low percentage wise, in state reimbursements to county governments and other local governments,” he said. “That’s when some of the numbers you’re seeing here (in the NYSAC report) could be visited upon a county like Genesee in our budget. That’s why the governor has yet to institute his across the board reimbursements that he was given the power to do when the state budget was adopted.”

Genesee County Manager Jay Gsell is at the front of the line when it comes to calling for the federal government to provide monetary relief to cash-strapped local municipalities but, at first glance, he’s thinks the latest $3 trillion stimulus plan may have gone too far.

“I think it is a bit of an overreach – although I haven’t read between the lines – and (observe) that the Republican Senate and White House are not exactly lining up anymore with fed stim 4,” Gsell said this morning in response to the 1,815-page bill proposal released on Tuesday night by House Speaker Nancy Pelosi.

The bill, called the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, is a $3 trillion coronavirus stimulus package that includes $915 million for state and local governments and additional $1,200 checks for individuals (up to $6,000 per family).

It also would provide an extra $600 a week federal unemployment benefit through Jan. 31 – an extra disbursement that was supposed to run out at the end of July.

Additional benefits of the bill include billions for essential workers’ “hazard pay,” coronavirus testing, U.S. Postal Service, the Payroll Protection Program, pandemic-era voting challenges in November, and hospitals and health care providers.

Another $1.2 billion is earmarked for police departments for salaries and equipment, and state and federal prisons.

View the entire bill here.

Batavia City Manager Martin Moore said he wasn’t sure how the proposed legislation would end up, but he’s all in on support for counties, cities, towns and villages.

“Any help that we can get will surely be welcome … especially given the unfunded mandates that we have to deal with and the reduced revenues,” he said. “(Another federal stimulus) would not only help us this year, but with next year’s budget as well.”

Gsell said the overarching parameters of the bill likely will be challenged by Republicans and President Trump, and pointed to an erroneous report in The New York Times that could make it even more difficult for it to pass.

“A reporter from The New York Times put New York in the same boat as Illinois and California, writing that New York is asking for a bailout of its state pension funds. That is a fallacy. This state’s retirement system is not in financial ruin; in fact, it is 96-percent funded, which is a platinum standard.”

He said the result of that report is that Senate Republicans and the White House perceive that all states with Democratic governors and looking for handouts to bail out their pension systems.

Gsell said New York’s counties see another stimulus as a “vital measure to bridge the gap” caused by significantly reduced sales tax and, potentially, state aid reimbursement. And, he said, time is of the essence.

“Getting relief relatively soon, this month, is vital, but it may not occur to June and July,” he said. “That won’t bode well for our workforce … and getting a sense of what is the new normal.”

He said there are a couple other bills out there, including one supported by Sen. Charles Schumer “which I think may have a better chance than this Pelosi bill.”

“When it goes from $1 trillion to $3 trillion, that’s a big jump, and any attempt at consensus-building gets blown up,” Gsell said. “Then it ends up being every Congressperson for himself, with many taking a wait-and-see attitude until after the economy opens up.”