Mayors from across the country are calling on Congress and the White House to return to the negotiating table and deliver critical aid to local governments in the next COVID-19 relief package.
“I would like to see Congress recognize the efficiency and effectiveness of our local cities, particularly in Georgia, at supplying services to our residents and businesses, and how the loss of revenue adversely affects our ability to do so. These revenue declines affect real people and real businesses. Our cities have similar needs to businesses for revenue support, and I hope that Congress will consider that in this next round of funding.” Jim Thornton, Mayor of LaGrange, GMA First Vice President
“To our representatives in Congress: Let us get to the table with you on federal funding. We’re the boots on the ground. When there’s an issue, most people call us. We know what our communities need, so let us be at the table with you to discuss that…Direct federal aid is supporting and sustaining every individual citizen that lives in our cities and counties. It’s critical and lifesaving for some of these communities. We’re in such uncertain times right now that we need everybody at the table working as closely together as we can to make sure that Georgia does not suffer financially any worse than we already have.” - Julie Smith, Mayor of Tifton, GMA Second Vice President
In August 2020, NLC released the City Fiscal Conditions 2020 Report during a virtual release event with special guest and Chief Economist, Dr. Mark Zandi of Moody’s Analytics. Findings in the report reveal that America’s cities are experiencing the fiscal consequences of this pandemic-downturn at an unprecedented speed—and like recent recessions, it will take years for municipal budgets to recover from the impact of COVID-19. This is the unfortunate reality that local leaders are facing from coronavirus and the increasing revenue loss cities, towns and villages are facing.
Key takeaways from the report:
- Nearly 90% of cities will be less able to meet the fiscal needs of their communities in fiscal year 2021 than in fiscal year 2020. We have not seen a lack of fiscal capacity reported like this since the low point of the Great Recession.
- Budget estimates for 2020, which were collect ed only two months after the pandemic started, demonstrate the immediate impact coronavirus had on sales and income revenues.
- All major local tax revenue sources slowed in fiscal year 2020, with severe year-over-year-declines in sales (-11%) and income tax (-3.4%) receipts, and on average, cities anticipate a 13% decline in fiscal year 2021 general fund revenues over fiscal year 2020.
Additionally, Zandi, discussed the grave fiscal impact of the coronavirus pandemic on America’s cities, towns and villages and the broader impact of local fiscal health on national economic recovery.
“Aid to state and local governments is a particularly efficacious way to support the economy… The single most effective way to support the economy, bottom line, the top of the list of things that lawmakers need to do for pandemic recovery … is providing that support to state and local governments. Without it, state and local governments will have to cut millions of jobs and make it very difficult to return to full employment.”
“That’s why we have the federal government… to step in and provide that necessary support to make sure things don’t evaporate. State and local governments are here because this is a catastrophic event. That narrative that we are bailing cities out is a false one.
“This isn’t a problem in one part of the country. We’re not talking about an issue in New England or Southern California – it’s coast to coast. It doesn’t matter where you are, you got hit hard by this. Every city and state is struggling, some more than others, but every corner of the country is struggling with this and needs help.”
Concluding the City Fiscal Condition 2020 Report release event, local leaders were even more committed to calling on Congress for direct federal funding for America’s hometowns to move the economy forward. A one-page summary of the report is available on NLC’s website.
Portions of this article were written by NLC’s Research Director Christiana McFarland and Bryan Griffith, manager of State League Services at the National League of Cities.
This article appears in the September/October edition of Georgia’s Cities Magazine.