Since the beginning of the COVID-19 pandemic, America’s cities have been confronting a devastating economic crisis. Revenues have plummeted, forcing cities to lay off critical employees and curtail essential services at a time when residents need them most. At the same time, cities have had to launch expensive initiatives to keep their residents safe, develop COVID-19 testing and treatment programs, and encourage COVID-19 vaccine uptake, all while being asked to take the steps necessary to jumpstart our nation’s economic recovery.
Mayors and local leaders are seeing the disastrous effects of this crisis up close, every day. They know that this economic pain is real, and that Americans are the ones who are suffering as a result. That’s why 425 mayors from across the political spectrum and more than 400 local and national organizations are calling on Congress to deliver direct financial aid for cities through the American Rescue Plan.
As early as May 2020, economic experts and business leaders quickly realized that cities and states would require direct financial assistance to weather this crisis.
May 2020: “State, local and tribal governments are critical to our recovery. In the short-term, they must be able to scale-up necessary programs, like contact tracing and testing. Given budget shortfalls, they are also soon facing impossible decisions – like whether to fund additional safety measures related to COVID-19 that will help businesses reopen more quickly or prevent layoffs of teachers, police officers, firefighters and other first responders. Without additional assistance from the federal government, the very programs that will help people get back to their lives and get back to work – from childcare to job training to small business support – will all be forced up on the chopping block.”
- Open Letter to Congress from over 100 business leaders, including Priscilla Chan of the Chan Zuckerberg Initiative and LinkedIn CEO Jeff Weiner
May 2020: “Failure to assist local governments will have a catastrophic effect on, not just safety, but the economy as a whole.”
July 2020: “States and localities are in desperate need of additional federal intervention before the bulk of the CARES Act funding expires this summer…To continue to provide services that its citizens need and to avoid severe budget and employment cuts that will drag down the economy, states and localities need more federal help.”
September 2020: “State and local governments, almost all of which face some form of annual balanced budget rule, confront fiscal shocks on both the revenue and spending sides that threaten to make the recession deeper and slow the recovery.”
- Byron Lutz, Federal Reserve Board; Bill Gale, The Brookings Institution; Alan Auerbach, University of California, Berkeley; Louise Sheiner, The Brookings Institution
Even conservative voices, like economists from the American Enterprise Institute (AEI), recognized the economic catastrophe cities are facing.
December 2020: “Republicans should recognize that states and localities were in the same position as businesses and households when the pandemic hit: unprepared for a once-in-a-century crisis and the economic devastation it wrought. It is unreasonable to withhold aid on the grounds that they should have been prepared; even the best-managed states are in bad shape today.”
As the new year came and went, local leaders, economic experts and editorial boards continued to make an urgent plea for state and local aid.
December 2020: “Federal aid for state and local governments is beneficial for the economy. A chorus of economists have found that the federal proposals to increase unemployment insurance, provide checks to families, and offer state and local assistance have a high return on productivity for the dollars invested. In contrast, economists say that a lack of state and local aid will result in further cuts to both public and private sector employment.”
January 2021: “Some Republicans are wary of sending more federal assistance to state and local governments. But they, not the federal government, are on the front lines in the war against covid, waging expensive campaigns while wrestling with revenue shortfalls and balanced-budget requirements. One result is more than 1 million layoffs of state and local government workers — so far. Without federal aid, there will be many more layoffs, including of critically needed personnel.”
- Glenn Hubbard, former chair of the Council of Economic Advisers under President George W. Bush, and Alan S. Blinder, former vice chairman of the Federal Reserve Board under President Bill Clinton.
January 2021: “Much of the financial burden of dealing with the coronavirus has fallen on state and local governments…If Republicans and Democrats want to unite the country and put red-state/blue-state hostility behind them, devising a sufficient, realistically targeted, state and local aid package would be a very good place to start.”
February 2021: “There’s no more time for political maneuvering or holding it hostage. We’re looking right down the throat of a disaster…We are no longer at a point where we can afford to be cute.”
Unfortunately, it’s been almost a year since the onset of the COVID-19 crisis and this financial aid has yet to materialize.
The House of Representatives recently passed the American Rescue Plan, which includes direct financial aid for cities and states. The U.S. Conference of Mayors urges the Senate to pass this much-needed legislation as soon as possible to deliver relief to America’s cities and support for our communities. This aid will allow our cities – the backbone of our economy – to continue fighting this virus and begin rebuilding our economy.
Business leaders, economists, first responders and thought leaders from across the political spectrum have been calling for direct state and local aid to cities of all sizes for nearly a year.
Now, it’s time for the Senate to listen to the experts and local leaders who are managing the economic effects of this crisis up-close, day-in and day-out. It’s time for direct financial aid for cities.