Holly shrub disease
Holly shrubs have strange growths on trunk and branches. Killing the shrubs. Looks like dried leaves. Could this be some type of fungus? Never saw this in NY.
It sounds like a lichen, which is a kind of fungus. It is normally harmless, though it grows on stressed plants. Here is more information: https://www.gardeningknowhow.com/ornamental/fungus-lichen/treatment-tree-lichen.htm