Suffolk County has asked the federal government to allow it to seek a piece of a multibillion-dollar bailout fund set up to provide money to the country’s most densely populated areas. Suffolk does not meet the eligibility threshold for the aid.
In a letter Monday to Treasury Secretary Steven Mnuchin, County Executive Steve Bellone said that help from Washington would be critical to assuring the stability of Suffolk’s 10 towns, 71 school districts, and 110 fire districts, among others, if property owners fail to make tax payments.
The federal fund, the $500 billion Municipal Liquidity Facility, was set up to provide a borrowing stream to help cities and the country’s largest handful of counties. Cities with a population of two million or more can apply for the loans, as can counties with more than two million residents.
Suffolk, though more populous than 11 states and the District of Columbia, with a 1.48 million population is below the cutoff.
Speaking to the press on Monday, Mr. Bellone repeated his plea: “We are requesting from the treasury secretary that he look at Suffolk County, where we are not only one of the largest governments in the United States of America, we are also one of the most heavily impacted regions in the county, arguably the most impacted region in the country.”
“What this would do would allow us to do the short-term borrowing necessary to deal with the cash flow issues that have, of course, resulted from revenues completely or virtually drying up in the county of course as we’ve shut down the economy,” Mr. Bellone said.
Representative Lee Zeldin, named by President Trump to the White House Task Force on Reopening the Economy, has called for expanding funding for state and local governments based on greatest need due to coronavirus-related expenditures. He sent his own letter to the Treasury Department and Federal Reserve on Monday, arguing that the two million-residents threshold was “too restrictive and will box out many large counties.”
The federal fund that Mr. Bellone and Mr. Zeldin would like the county to have access to is intended to be a stopgap in the case of income tax deferrals and extensions, increased expenses brought on by the virus, and falling tax revenue. The money can also be used to make principal and interest payments to holders of municipal debt.
There is another pandemic relief fund that could help local governments. In an opinion piece published in Newsday, State Comptroller Thomas DiNapoli described a financial parallel to the hospitalizations and deaths caused by the devastation. New York and other hard- hit areas need money to balance their books and that cash needs to come from Washington,” he argued. He estimated that state revenue from income taxes and other sources would fall by as much as $15 billion.
He said that $150 billion in the early-April federal CARES Act was limited to local governments with populations above half a million, which would include Suffolk County. Even so, this money was limited to Covid-19 related expenses, not to make up for the expected revenue shortfall.
“In our state, only New York City and a half dozen other municipalities directly qualify for this aid, a small fraction of our local governments. The New York Conference of Mayors is on target in calling for the elimination of population thresholds for additional local aid,” Mr. DiNapoli said.
In the terms of the CARES Act, municipalities with populations of fewer than 500,000 were expected to ask for financial help from their respective state lawmakers.
In East Hampton Town, Len Bernard, the budget officer and finance director, expressed cautious optimism in an interview this week. “Believe me, we’re keeping a close eye on it,” he said. About 65 percent of the property tax payments due by the end of May have already come in and Mr. Bernard expected to meet the target.
Town tax receivers collect property taxes for school districts and other taxing entities. A portion of property taxes also goes to the county, though if there is a shortfall, the town and schools get paid first, Mr. Bernard said.
“What will come in in the first three weeks of May remains to be seen. If we don’t get it, we are in uncharted waters,” he said.