As cities across the U.S. struggle to contain the coronavirus pandemic, local leaders are being forced to make extremely difficult decisions. This is due to unprecedented declines in tax revenues and skyrocketing costs, despite which the government is struggling to keep local residents safe.
As we work together to resolve the ongoing public health crisis, cities are watching a looming financial crisis whose outlines are already taking shape. Cities, towns and villages from across the United States are facing imminent and catastrophic cuts to essential services.
Without a strong response and critical assistance from our federal partners, the national economic recovery we all want to see will be indefinitely delayed. Many cities – especially those with small populations – will be left with few, if any, resources, and with those resources we need to rebuild our local economies after the downturn caused by the pandemic.
By the end of this year, cities in my home state, Georgia, are projected to have a 31% revenue shortfall due to the COVID-19 pandemic. This is because spending is going up and tax revenues are going down. At the same time, municipalities across the country are beginning to feel the effects of these anticipated cuts: 74 percent are already making cuts and budget adjustments, 65 percent indicate they will have to postpone or cancel planned capital spending and infrastructure projects, and about one-third say they will have to furlough or lay off local public employees.
Since mid-March, 47 million Americans have filed for unemployment benefits for the first time since workers, including local government workers, lost their jobs because of the economic pause. It’s important to remember that these aren’t just numbers – these are our families and friends, members of our communities and many of our dedicated public employees. Without urgent federal assistance, the number of people filing for unemployment benefits will continue to creep higher and higher. Soon municipalities will have no choice but to lay off even more workers because, unlike the federal government, local governments must balance their budgets every year.
In addition, the delay and cancellation of infrastructure projects that most cities face will further undermine local job growth and business activity, hindering our ability to quickly begin a national economic recovery. Whether it’s building roads, bridges or hospitals, the people hired to complete these projects and the local businesses that execute them will essentially be left in limbo. Cities desperately need the financial certainty needed to plan for the cost of job creation and business support in the months and years ahead.
We need Congress to act, and quickly, before these forced budget cuts, layoffs and canceled projects stop our communities from safely resuming activity and slow our nation’s economic recovery efforts. Yes, there is some bipartisan movement in Washington to support our cities, but there needs to be more of it there and in short order. Unless action is taken soon, municipalities across the U.S. will lose $360 billion in revenue over the next three years because of the impact of COVID-19. Alarmingly, small towns with populations under 50,000 will be among the hardest hit, with the vast majority expecting revenue shortfalls as early as this year, and half preparing to cut both public services and local government employment.
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