U.S. Conference of Mayors Has Launched a Fiscal Pain Tracker to Highlight the Real Challenges Facing Cities
Washington, D.C. – The fiscal pain caused by the COVID-19 pandemic is not theoretical – it’s manifesting itself in growing numbers of out-of-work city employees and perilous service cuts for residents everywhere. All across the country cities big and small are taking on new expenses as they lead the on-the-ground response to the pandemic. Meanwhile, with the economy stalled, city revenues have plummeted, creating sudden and gaping budget holes.
Despite mayors’ urgent and repeated calls for resources, Washington has not provided cities any assistance to fill these budget gaps, and cities are being forced to make once-unthinkable cuts – including laying off and furloughing employees who provide critical services in the midst of a pandemic. In the most recent jobs report, the Labor Department reported a loss of nearly one million local government jobs in the last month alone. Cities are also being forced to cut critical programs, including those providing public safety services. In response to Washington’s inaction, earlier this week the United States Conference of Mayors launched its Mayors COVID-19 Fiscal Pain Tracker, a regularly updated resource that brings to life the painful budget decisions that cities are being forced to make.
Below are just a few of the more than 160 – and growing – stories that can be found on the Tracker.
In Macon, expenses are up, tax revenue has fallen off a cliff, and furloughs are expected. An additional 6,000 hours of overtime has been paid compared to the same period in 2019, Macon-Bibb County Mayor Robert Reichert has reported, and March sales tax collection was down almost $300,000 compared to the prior year, a result of only a two-week business closure. April sales tax collection is expected to show a decline of at least $600,000 for the full month. “If we remove vacant positions from the budget, we would still need to furlough 220 full-time employees to meet the gap in revenues and expenses,” the Mayor wrote.
Battle Creek, Michigan
Battle Creek is estimating a 20 percent reduction in the City’s income tax revenue that is already putting city employees out of work. Income taxes total more than 30 percent of the city’s general fund revenue, the bulk of which covers salaries and benefits for City employees. The 20 percent reduction amounts to a $3.4 million loss. These budget gaps resulted in the furloughing of 95 City employees for the month of May and, for some, part of June. Leaders will evaluate the need to continue furloughs on a month-to-month basis, but this may be extended through July.
In an April 30 interview on NPR’s All Things Considered, Mayor Nan Whaley said her city’s response to the COVID-19 economic crisis included the furloughing of 470 employees – about 25 percent of Dayton’s workforce – across nearly every department except for police and fire services. She noted that very little of the federal government’s aid during the crisis has made its way to state and local governments, and the aid that has been disbursed has gone to the limited number of cities with populations of more than 500,000, while most people live in smaller cities like Dayton, which has a population of about 140,000.
Mayor Mike Palazzolo reports that the City is projecting a 15-20% reduction in comprehensive revenues, with the largest a 25% reduction in sales tax receipts. All enterprise and special funds anticipate a more than 15% loss. The City has furloughed or laid off 211 employees to date. The city is also curtailing capital improvement projects and making other budget cuts, which Mayor Palazzolo points out, will have an impact on both the local and regional economy since the City exclusively uses contractors, contract labor and the private sector to complete projects.
On April 14, the City of Boulder announced it would furlough 737 employees – 175 standard and 562 seasonal and temporary employees – as a result of the economic impact caused by the COVID-19 pandemic. Boulder anticipates lost revenues of at least $32-41 million, or nearly 10 percent of total annual revenue, excluding utility fees, since the Stay-at-Home order went into effect the previous month.