College Towns Feeling the Financial Pinch of Coronavirus

The impact on communities could have long-term effects. A loss of business means a drop in tax revenue and less money for services like road repairs and street cleaning.

College towns across the country are feeling the effects of the coronavirus, with their businesses left in limbo.

During the school year, shops and restaurants are usually packed with students in Ithaca, New York, where every other person is connected to Cornell University or Ithaca College. But business instantly plummeted in March when the pandemic arrived and students were sent home.

“March very, very much felt like the end of the world,” says business owner George Papachryssanthou. He owns Chatty Cathy Coffee and Juice Press as well as Ithaca Wine and Spirits in what's known as Collegetown, and he says sales dropped around 80%. “We lost April and May, which are crucial business months,” Papachryssanthou says.

Hotel rooms sat empty on what would have been graduation weekend, and many apartments remain vacant without rent checks. Cornell undergrad students alone contribute $4 million a week to the local economy. Gary Stewart, Cornell’s associate vice president for Community Relations, says “I think people are realizing now for the first time that students are a prime economic driver.”

The impact on communities like Ithaca could have long-term effects. A loss of business means a drop in tax revenue and less money for services like road repairs and street cleaning.

The city has already furloughed a quarter of its staff and reduced police staffing by 10%. Svante Myrick, the mayor of Ithaca and a Cornell graduate, took a paycut. “If our businesses have to stay closed, we could be losing up to a quarter of our revenue for the next year, which would force mass layoffs and large property tax increases,” he says.

Universities nationwide are economic engines for their communities. According to the International Town and Gown Association, the cities surrounding Colorado State University, Boulder, Greeley and Fort Collins, saw tax revenue drop more than 21% in April from the year before. Most college towns still have no idea when students will return with many universities holding classes for the fall semester virtually.

Classes are expected to begin in the fall for Cornell students. “We always say here in Ithaca that for Cornell to succeed, Ithaca has to succeed, and vice versa,” Stewart says. It’s a symbiotic relationship as college towns educate themselves on a new reality.

College towns are also impacted by the census, which decides funding and is being counted this year, potentially without a large part of their population.

(CBS News)

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