County Manager Gsell: HEALS Act no panacea for what's ailing state and local governments
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 7th,” 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.”