Town officials say it’s still too early to tell full effect pandemic will leave on budgets

The COVID-19 pandemic will potentially have a large impact on the budgets of Riverhead and Southold towns, but just how much of an impact remains unclear, officials said. 

Both towns closed their town offices — other than police — to the public and many of the towns’ revenue sources have also been halted statewide by executive orders from Gov. Andrew Cuomo aimed at preventing people from congregating and potentially spreading the virus. 

Among the larger revenue sources for towns are building- and planning-related funds, residential rental fees, beach fees, mortgage tax revenue, county quarter-percent land transfer fees, and even sales taxes, all of which could be impacted by the state-mandated shuttering of things like retail stores and construction. 

Riverhead’s 2020 budget, for instance, anticipates $1,715,300 in sales tax receipts from the state and county, while Southold’s 2020 budget anticipates $1,288,673. 

Building department fees in Riverhead Town were projected at $900,000 for 2020 while Southold’s 2020 budget anticipates $700,000 in building inspection fees. 

Suffolk County’s Budget Review Office is reportedly projecting a $100 million loss in sales tax revenue for 2020.

Suffolk County has a sales tax rate of 4.25% and New York State’s sale tax rate is 4% and the towns receive a portion of the sales tax receipts, although the towns do no charge sales taxes themselves. 

Revenue shortfalls could result in increases in town property taxes, but officials say it’s too early to project by how much.

“It’s going to have an impact, the extent of which we are not sure of until we see the full impact of this crisis,” said Riverhead Supervisor Yvette Aguiar. 

“All of the town supervisors are concerned about this and we are conversing on possible impacts. We are currently doing an assessment of our revenues,” she said.

“It would be difficult for Southold, or any town, to calculate what the fiscal impact the COVID-19 will be,” said Southold Supervisor Scott Russell. “We are still in the middle of the crisis and any longer-term impacts cannot be calculated at this point. It is only April and to predict what the rest of the fiscal year will bring is simply not possible. Although some of the impacts we will experience will undoubtedly be influenced by the impacts of other governmental bodies, what those are is too difficult to assess with eight months to go in the year.”

But Mr. Russell said that so far, “The town is in good fiscal shape right now. While other towns have been discussing the possibility of layoffs or other drastic actions, we have no need to consider any.”

He added: “I am far more worried about the health of our local business and of the health, safety and welfare of our community. Trying to predict, then react, to fiscal circumstances that are yet unknown, is less of a priority to me.”

Ms. Aguiar said she’s been on the phone all day trying to find funding sources to help the town. She said the $484 billion federal relief package signed into law by President Trump last week does not include money for small towns, such as Riverhead.