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Home » News » Business » DAILY DEBRIEF: How quickly did the economy shift in the last 45 days? (podcast)

DAILY DEBRIEF: How quickly did the economy shift in the last 45 days? (podcast)

– By Josh Durso

At this point it’s almost impossible to find an area of life that hasn’t been impacted by the coronavirus, or COVID-19. Here across New York, non-essential retail has been shut down for more than two weeks, restaurants and bars have been reduced to take-out only, and even grocery stores, which were deemed essential when it all began — are enforcing new restrictions on how many can be inside a store at one time.

Make no mistake: This has been one of the most sudden changes to modern life anyone has seen. Social distancing is here; and it’s not entirely clear when those restrictions will be lifted across the country.

Part of the problem with the coronavirus pandemic isn’t the unknown, as much as it is the regionality of it all. Public health officials say everyone is at risk – across the board – so social distancing protocol should be followed.

How quickly did this happen, though? When we look at the Finger Lakes and Upstate New York – how sudden was the shift from confidence, to widespread bewilderment?

For years the Finger Lakes, Central New York, and Southern Tier have relied heavily on tourism to drive the collective economy. In 2019 it was reported that 5.5 million visitors to the Finger Lakes region generated 2.4 billion dollars in business. Those numbers came from a study by Travel Marketing Insights, which looked at travel and business trends in the region from 2018.

Undoubtedly, 2019 was another good year for the region’s tourism-based economy. That said, there’s a good chance that moving forward — 2020 will be significant different, if not just a challenge.

In late-February, Vinnie Esposito was in-studio discussing economic development efforts across Upstate New York. His sentiment, that Upstate was headed in the right direction, was widely shared and accepted. Not only that, though, he was confident in the positioning of the region.

“I’m not concerned about a slowing of the economic development programs in New York State. I am concerned about the general economic picture in our country, how the markets are doing how the economy is doing, because we’re building momentum. But that’s still a very fragile thing at every level of communities in upstate New York. And we need to make sure we’re protecting and diversifying our economy as much as possible. So that if we do, you know, see some kind of economic downturn, we don’t completely undo the progress that we’ve made, which is really just starting to catch hold in most places,” Esposito said at the time. “Big Picture, of course, the state’s financial picture has an impact, particularly as you start to talk about taxes and revenues for different things. But the governor is still holding the line on reducing income taxes, continuing pressure on property tax caps, and that’s a permanent thing, but also providing more incentives for municipalities to stay underneath that.”

While that interview was recorded in the last week of February, it was more than a month after the first case of coronavirus was identified in the U.S. Even then, merely two weeks before the economy would be shut down — a vast majority of leaders across the board underestimated the impact it would have on daily life.

Two weeks later, we sat down with Michael Kracker from Unshackle Upstate. It would be one of the last in-studio interviews we would do with a guest, and happened days before Governor Cuomo announced full-closure of non-essential businesses.

“That’s the 800 pound gorilla in the room,” Kracker said. “It’s involved in every conversation. We were in the Capitol on Tuesday advocating for issues and it was a ghost town Tuesday’s are usually a mob scene in Albany. You’ve got thousands and thousands of advocates during budget season, making their case. We were one of few groups in the capital. And you can definitely feel a culture change also in the businesses I talked to businesses are starting to feel the impact. It’s not just evident in people’s 401 K’s in their, you know, their brokerage accounts. Small businesses on Main Street are starting to feel a pinch. By you know, as people are self isolating. They’re not going out to eat. They’re not going to the movies. They’re not traveling for conferences. I saw a story yesterday. Hotel in Buffalo lost $80,000 in a single day these entire conference canceled.”

Now, losing $80,000 pales in comparison to what the regional economy has lost already, and will surely lose over the next several months — even if restrictions begin to be lifted. But even then, New York State will have a major interest in making sure that Upstate’s economy can recover, like Vinnie Esposito said.

“The Upstate revitalization initiative, just in the Finger Lakes region was $500 million, right. In the totality of the nine years of the Regional Economic Development Councils, there’s been another almost $800 million invested. That’s $1.3 billion worth of investment just in the Finger Lakes region under Governor Cuomo for the signature economic development initiatives. That’s not even a fifth of the amount of funding the state is invested in various aspects of economic development when you look at transportation and infrastructure and environmentally green programs,” he said.

But what about small businesses? The region’s economy is powered by small business owners, many of which have taken a direct hit from the pandemic.

“You know, I’ve been the executive director for a few years and things have been just outstanding. So without being too melodramatic, I mean, my hearts broken by what’s going on, because it has been so vibrant, Mark Palmeiri said. He’s led the Geneva Business Improvement District over a number of years, and spoke with us the same day Governor Cuomo shut down all non-essential businesses. “It’s an experiment. It’s a journey. And it’s finding your way through the dark,” he added.

Since those conversations, Congress approved- and President Donald Trump signed a 2 trillion dollar relief package that will send 1,200 and 2,400 dollars to qualifying individuals. Those who make less than 75,000 and 150,000 dollars respectively. Businesses are also getting major relief in form of loans, which can turn to grants if used to retain employees, or for other qualifying expenses. The question for many, though, remains “Is it enough?” Or will another relief package be necessary if the economy does not recover as expected.

Governor Cuomo says the first step is getting through this healthcare crisis. He says the next step will be restarting the economy.

For the Finger Lakes Region, tourism is the big question mark. Will people have the opportunity to travel this summer; and from where will they be able to travel? Even if businesses make it through this first economic wave of the pandemic, will they be able to sustain themselves through an event that could last significantly longer?

Governor Andrew Cuomo says the economy will be restarted when the time is right, and New York will be there for small business owners. But, New York State will face its own financial crisis when this is over. He noted in multiple press briefings last week that the state will have a deficit of more than 15 billion in a couple months. And at the same time, New York is woefully uncertain what revenues will even look like — as it moves forward past the coronavirus.