To date, Congress has approved four measures to address the ongoing coronavirus pandemic. In early March, the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (
HR6074) provided $8.3 billion in emergency funding to fight coronavirus. In mid-March, the Families First Coronavirus Response Act (
HR6201) provided free testing for coronavirus, paid emergency leave, enhanced unemployment insurance, and improved food and health security. In late March, the third aid package, the CARES Act (
HR748) provided $2 trillion in relief for individuals, small businesses, hospitals, and state and local governments over 500,000 in population. And in mid-April, Congress passed an interim bill to increase funding in the $484 billion
CARES Act 3.5 for the Paycheck Protection Program, hospitals, and virus testing.
So far, local governments have largely been left out of Congressional action to provide federal aid in response to the crisis. It is imperative that the federal government support cities who are meeting the challenges of the pandemic head on.
- The nation’s economy depends on the ability of our cities to recover from this crisis. Cities are Georgia’s economic centers, they are home to approximately 70% of jobs in the state and they account for over 90% of the GDP. If the federal government fails to support cities, they will succeed in setting back the nation’s economic recovery by years. Failure to help local governments may hit rural areas the hardest, according to some economists. Georgia cities exercised every strategy available to emerge from the recession in good financial condition and succeeded in doing so. Georgia cities are facing an even greater fiscal crisis with the COVID-19 pandemic and it is impacting cities just as they are recovering from the Great Recession. Following the Great Recession, Georgia cities endured cuts to intergovernmental aid rather than receiving additional needed assistance which made it much more difficult to weather the recession. This lack of support served to lengthen and deepen the fiscal impact of the recession.
- Cities are responsible stewards of public resources. Cities are required to adopt balanced budgets every year. Georgia cities are responsible stewards of public resources, observing conservative financial practices and sound management across the board. As an example, in GMA’s experience with its leasing programs, no city has failed to appropriate payments and therefore, we have had no defaults in over 25 years and almost $2 billion in financings to our members. An examination of the 38 Georgia cities that are rated by S&P shows an average AA rating supported in part by strong reserves, averaging 44.5% for these municipalities.
- Cities are struggling to pay for critical services. Despite having sound financial practices in place leading up to this crisis, municipal leaders have raised the alarm that revenues used to pay for essential services are declining as more and more customers are unable to pay their bills. Many cities have suspended service disconnections and are struggling to maintain service levels as revenues decline and reserves are depleted. Cities face difficult decisions about which services to cut, considering that statewide, 70% of municipal expenditures are for public safety, public works, health & welfare services, and housing and development. Cities are also considering layoffs and furloughs, which will make it even more difficult to maintain service levels and keep first responders on the front lines when they are most needed.
- Service levels will be impacted by declining revenues. A survey conducted of Georgia cities in early April revealed that 81% of cities anticipate significant impacts to the provision of key services like police, sanitation, parks, and utilities. Several cities have reported to GMA that LOST revenues were down by 50% from February to March, and cities have told GMA they are experiencing reductions in hotel/motel tax of 80%. Most cities have temporarily suspended utility disconnects and are working with customers to maintain services, but some cities report up to one third of their customers are on a disconnect list. Every city will have major revenue losses that will affect their ability to fund essential services like police, fire, sanitation, public works, water, electric, and gas. These services are critical to maintaining the quality of life residents expect and need. Without federal assistance, we face the real possibility of some cities not surviving and others struggling for years to recover, if they ever fully do.
GMA Call to Action
As Congress continues to work on a fourth stimulus package for coronavirus relief, GMA supports federal legislation that will provide $500 billion in federal aid over the next two years to help cities and counties, regardless of size, respond to and recover from COVID-19. The money should be split 50/50 with the counties, with cities receiving $125 billion in the first year. Congress passed the CARES Act that contained the Coronavirus Relief Fund, which allocated $150 billion to states and local governments. The problem is that only the most populous 36 cities and 135 counties in the country received direct funding from the Coronavirus Relief Fund. In Georgia only one city, the city of Atlanta out of 538 cities and only four counties, Gwinnett, Fulton, Cobb, and DeKalb out of 159 counties received funding. The money that GMA is asking for is not a handout, nor is it a federal bailout, as some in Washington suggest. The money is an extension of the local government-federal government partnership. Relief for cities means quality of life for residents. The proposed legislation will provide substantial, direct relief for every city in Georgia.
Now is the time for Congress to act to support local residents and economies through a fourth supplemental bill that provides direct relief to all cities for virus-related expenses and to help maintain essential services. GMA is calling on every city official in Georgia to remain in touch with federal leaders to explain what is going on in your communities and the challenges you are facing financially as a result of the coronavirus. Members of Georgia’s Congressional delegation must hear directly from city officials about the challenges you’re facing and how they can help. GMA is requesting:
- Personalize the attached template letter for your city by filling in the blanks in highlighted sections.
- Mail and email a copy of your letter to Georgia’s Senators and House Members, and send a copy to William Crozer with the White House. Contact information for key staff in all offices is attached.
- Share a copy of your letter with Becky Taylor at GMA. We will post all letters we receive on the GMA website.
- Notify GMA staff of any feedback you receive from your Congressional delegation members or from the White House.
Without your local stories, Congress cannot understand how cities are being impacted through this crisis. GMA will continue to fight for emergency fiscal assistance to all local governments, fair and direct allocations to all local governments, and maximum flexibility to address the consequences of coronavirus on our cities. By lending your voice, we can succeed in obtaining much-needed federal funds for cities to support Georgia’s residents, communities, and local and state economy.
We’re all in this together. On behalf of GMA, thank you for your leadership and your support of this important effort.
Larry H. Hanson
GMA Executive Director