BUFFALO, N.Y. (WKBW-TV_ — An analysis done for the National Tax Journal, and published in the New York Times, looked at 150 U.S. cities to see how they will be impacted by lack of revenue due to COVID-19. Researchers used sales tax, tourism, and direct state assistance as factors in deciding which cities would face the deepest revenue shortfalls.
According to the report, Buffalo is projected to have a "severe scenario" as the city is projected to have a nearly 20% decline in annual revenue. Only Rochester had a worse projection. Syracuse was also estimated to have a "severe scenario" and was ranked just under Buffalo.
HOW BAD ARE THINGS LOOKING FOR BUFFALO?
7 Eyewitness News Reporter Ed Reilly spoke with Dottie Gallagher, president & CEO of the Buffalo Niagara Partnership. Gallagher said there is a serious concern about the WNY economy and a lot of unanswered questions at this point.
Among the most serious financial issues are the hit to tourism dollars, lack of federal assistance, the ongoing issues with large numbers of unemployment (which has disproportionately hit low-wage earners), and the struggles that small businesses are going through.
"All of those factors really predict an uncertain economic future, but we have to do the best we can do and keep as much money in our economy as possible," said Gallagher.
The Buffalo Niagara Partnership is now urging people to reduce online shopping and put money into local businesses instead. "Because it is really going to make a difference if we do," explained Gallagher.
On the positive side, Gallagher said sales tax revenues were better than expected thanks to a surge in big-ticket buying with items such as real estate and cars.
Also, Gallagher said developers are not indicating they plan to slow work on projects underway in Buffalo.
BUFFALO MAYOR BYRON BROWN ALSO ISSUED A STATEMENT CONCERNING THE CITY'S FINANCIAL FUTURE
"The City of Buffalo is vulnerable to the type of downturn we are facing because of our reliance on sectors of the economy that have been very hard hit by the COVID-19 pandemic: healthcare, education and cultural tourism. The 18.5% unemployment rate, combined with the withholding of state aid and declining revenues (which make up a significant portion of our operating budget) indicate an economic recession that will extend beyond the immediate public health crisis. We have taken action to mitigate these impacts, including maintainIng our workforce and services, assisting businesses and restaurants in re-opening, using federal funds to curb homelessness and ensuring that development projects like Seneca One continue moving forward, but without significant federal disaster relief funding these steps will fall far short.
This is different than the Great Recession of 2008 for Buffalo, which was the result of a burst housing bubble that initiated a more general financial sector crisis. While Buffalo's unemployment rate grew--and employment came back at a slower pace than the national average--the worst of the housing crisis bypassed us because we were never part of the housing market boom. This insulated some sectors of the economy, and when combined with significant State investment, allowed us to rebuild.
Now, we are not insulated from the fallout and the likelihood of additional State investment is weakened by the severe impact of this crisis on a global scale. If federal action is not forthcoming in the near future, jobs, services and new investments will have to be reduced and eliminated."