American mayors are asking for help.
Unless Congress adopts a coronavirus relief program, cities and towns across the country are going to struggle to “keep the lights on” and provide basic services like answering 911 calls, Joe Buscaino , president of the National League of Cities and pro tempore president of the Los Angeles City Council, told Axios.
In May, the National League of Cities (NLC) found that American cities face a $ 360 billion shortfall over the next three years. And since then, there has been little movement from the federal government to provide the support needed to avoid the holidays and cuts to basic services needed to keep cities afloat while they govern during the pandemic of Covid-19.
In October, Dayton, Ohio, Mayor Nan Whaley told Fox affiliate in town that “without federal stimulus, both for the city of Dayton and communities across the country and for small businesses, you are going to see dramatic effects.” She added that Dayton had already been forced to cut $ 10 million from its budget and expected another $ 10 million cut for the 2021 budget – that could mean things like “less police, less fire, less public works ”.
It may all sound familiar. Following the Great Recession, cities faced massive economic shocks by cutting back on services like garbage collection and bus services. In Colorado Springs, Colorado, “a third of the city’s streetlights were turned off to save money,” Governing magazine reported. States and cities have also had to fire and fire civil servants – people who provide needed services like firefighters, teachers and police.
A 2009 report by the Center for Economic and Policy Research found that “more than 110,000 jobs have been cut from state and local governments [between 2008 and 2009]. This number includes more than 40,000 teachers as well as nearly 4,000 uniformed police and firefighters. “
As my colleague Emily Stewart wrote, austerity measures, such as cutting services and increasing taxes, “made the Great Recession worse and probably lengthened it as well”:
Speak Center on Budget and Policy Priorities, the state budget deficits totaled $ 690 billion from 2009 to 2013. If the multiplier of all tax increases and spending cuts used to make up these deficits was 0.5, it cost $ 345 billion to the economy. If the multiplier is 2, it cost the economy almost $ 1.4 trillion in lost production.
CBPP anticipates an even deeper deficit in 2021 than in 2010, the worst of the Great Recession. This means that unless the federal government compensates for lost state revenue, the coronavirus recession will worsen and the recovery will weaken significantly.
Cities could now be in an even more difficult situation.
“The Great Recession has been a story of long and drawn-out budgetary difficulties – it’s more serious,” explains Howard Chernick, professor emeritus of economics at Hunter College and the Graduate Center at the City University of New York, told the New York Times. The speed with which Covid-19 arrived and started causing enormous economic hardship has left cities and municipalities with little time to prepare.
State mayors across the country are united in their desire for federal economic relief.
“Mayors are working hard, stretching our budgets and using all the tools at our disposal to keep our communities safe, but the pandemic is a national emergency that requires a strong and comprehensive national response,” said the Conference of State Mayors. -Unis, a non-partisan group representing cities with more than 30,000 inhabitants, wrote in October. “This crisis will not go away anytime soon, and we urge lawmakers to work in a bipartisan fashion to push a bill past the finish line.”
Unlike the federal government, cities are either legally or politically prevented from accumulating massive deficits. The federal government, on the other hand, can raise funds by selling treasury bills and quickly distributing aid to states and towns. So why isn’t it?
Partisanship is an important factor. President Donald Trump and Senate Republicans have repeatedly accused Democrats of simply wanting a ‘blue state bailout’, alleging Democratic-leaning states are in peril due to their mismanagement of budgets instead. a pandemic that has closed businesses and led to record unemployment.
As Li Zhou wrote for Vox, in September, Senate Republicans hoped to pass a “meager stimulus bill” that excluded additional state and local aid. Democrats opposed the package and remain in favor of a $ 2.2 trillion package with more than 400 billion dollars for state and local governments. Senate Majority Leader Mitch McConnell has indicated he may be open to state and local aid, promising that a stimulus package will be the focus when the Senate returns after Thanksgiving, according to the Washington Post.
Pelosi and Schumer were only interested in Bailout Money for poorly run Democratic cities and states. Nothing to do with China Virus! You want a trillion dollars. Of no interest. We go in a different way!
– Donald J. Trump (@realDonaldTrump) August 7, 2020
But it’s not just the “blue” areas that are suffering – it’s the country as a whole. As an analysis of 150 major US cities by the National Tax Journal found, according to the New York Times Upshot:
[The study] refutes some of the dominant, largely Republican arguments that have blocked [federal relief package] negotiations: this federal aid will only bail out the blue towns and those which have mismanaged their finances.
Many cities facing large losses are located in states represented by Republican senators, such as Florida or Louisiana. And the analysis found little relationship between whether a place was financially healthy before the pandemic and the more dire income deficit projections.
Like the Pittsburgh Post-Gazette reported, City Mayor Bill Peduto hopes that the drastic cuts to city budgets “… will also be a clear call to all Republicans in the Senate that this will affect people, and that it will take time off from public security officials and other employees. ”
But Congress adjourned for Thanksgiving without passing further relief. Mayors are hoping that with a new administration in the White House next year, a federal aid package may be on the horizon.
“Just the fact that we have a partner in the White House will be welcome,” said Mayor David Holt of Oklahoma City told Axios. “It’s not an element of strategy, but it makes all the other elements of strategy possible.”