Joseph Stieglitz, an economist who has won the Nobel Prize, was interviewed last week regarding the economic crisis precipitated by the Coronavirus.
In discussing the problematic responses of Congress and the President, he observed that one of the most glaring issues being ignored is the crisis that states and local governments are going to face.
According to estimates from the New York State Association of Counties, lost sales tax revenues could be devastating for local governments in New York. I got these numbers from a Gazette Newspaper article written by Stephen Williams :
- Albany County could lose between $11.2 and $34 million.
- Fulton County could lose between $1 and $3.2 million
- Montgomery County could lose between $1 and $3.2 million
- Saratoga County could lose between $5.9 and $24 million
- Schenectedy County could lose between $3.6 and $11 million
- Schoharie County could lose between $583,000.00 and $1.8 million
[JK: We are so fortunate to have Stephen Williams still covering our county. Given the retirements and turnover in newspapers, to have Mr. Williams institutional memory serving us is extremely fortunate. He has an exemplary record for fairness and accuracy. Thank you, Stephen]
Here in Saratoga Springs, where much of our city income is dependent on the hospitality industry, real estate, and retail sales, the impact is potentially devastating.
This financial threat comes on top of the potential loss of 2.3 million dollars of VLT money from the state. While this money has been restored in the NYS Assembly budget it is not in the Senate version. It remains to be seen whether it will be included in the final state budget.
The city does such an excellent job that many people are not aware of all the services the city provides. From the maintenance of our roads and water supply to fire and police protection, city employees do the work that is often taken for granted but is what makes Saratoga a safe and congenial place to live.
I spoke to Commissioner of Finance Michele Madigan. She offered the following:
“Fortunately our city is going into this turbulent time financially strong. We have a top bond rating. We have excellent cash flow. We have very strong internal controls and with the new addition of Lynn Bachner as our budget officer, we have a detailed grasp of the budgetary needs of our departments.”
“Still as a country we need the Federal government to think strategically about insuring that the local services provided by our towns, villages, and cities are delivered during these difficult times.”
We have yet to see President Trump meeting with mayors or other local officials, but we regularly see him meeting with corporate executives. While we need to protect their employees, we have a history of our large corporations exploiting Washington. The airline industry was showered with tax breaks in the last tax package. Instead of establishing reserves for potential crises such as we are now experiencing, they spent literally billions buying back their own stock to inflate the value of their executive’s options. Now the taxpayer is expected to bail them out. We cannot let these airlines fail, but hopefully (and I do mean hopefully)the Federal government will insist on bailout terms to protect employees and the public interest.
I am pessimistic about what the financial “rescue” package will look like, however, once the lobbyists get done.
Reorganization In The Finance Office
In response to the looming financial challenges to the city brought on by the pandemic, Commissioner of Finance Michele Madigan received City Council approval to hire a Budget Director for the City of Saratoga Springs.
. “Our efforts to protect the health, safety, and welfare of our citizens and visitors are dependent on our ability to manage the economic impacts of the current, and rapidly changing situation,” Madigan explained. “There is no better time than now to ensure a strong finance team is available to work through the looming financial situation that will affect city revenues and expenses in the very near-term.”
Lynn Bachner has been hired to fill this new position [JK: Full disclosure, Lynn is a friend].
Lynn Bachner is an exceptional appointment. She has a Juris Doctor from University of Wisconsin Law School and Masters Degree from Johns Hopkins.
She was the Deputy Commissioner of Finance for eight years for two different Finance Commissioners during the administrations of five different Mayors. She is currently the Executive Assistant to Mayor Meg Kelly.
Ms. Bachner enjoyed the reputation of knowing every detail of the expenditures of every city department which explained her ability to craft budgets that were accepted by the other city departments. Given the potential for conflict in crafting the city budget, the respect and popularity she enjoyed at city hall reflected both her knowledge of details and sense of fairness.
Regrettably, in light of the looming challenges for city revenue, in order to hire Ms. Bachner, Commissioner Madigan had to indefinitely furlough Deirdre O’Dwyer -Ladd, her Deputy. Ms. Madigan praised Ms. O’Dwyer-Ladd in her announcement regarding the reorganization.
Ms. O’Dwyer-Ladd truly is an exceptional person. Those cynical about public employees would get a healthy education on the quality of those who work for the city if they had the good fortune of knowing her. I feel badly, not only for her but for the city, that we had to make this sacrifice.