Cities worry about post-shutdown pain

Cities worry about post-shutdown pain

Tight city budgets were stretched thin during the 35-day partial shutdown, and some officials fear the damaging financial effects will extend beyond the reopening of the federal government.

Cities across the country in recent weeks have stepped in to fill shortfalls left by shuttered federal agencies.


Some, like Washington, D.C., offered no-interest loans or mortgage assistance to furloughed federal workers. Others like New Orleans have said they will waive penalties for late tax or tuition payments.

But the budget strains go beyond the 800,000 government workers who have gone more than month without a paycheck. They also impact those who rely on federal benefits for housing, food and transportation subsidies.

“Our food pantries, the lines have grown significantly,” said New Orleans Mayor LaToya Cantrell (D). “We have to respond to people’s needs in real time.”

A huge portion of city budgets come from the federal government, for everything from the Community Development Block Grant program to Housing and Urban Development funding to pay for apartments for low-income residents and Justice Department grants to fight crime.

In San Jose, Calif., the city council this week passed an ordinance that would prohibit landlords from evicting anyone who cannot make rent because of the shutdown, covering residents who are federal workers or those who rely on government assistance to pay their housing bill.


Mayors across the country, meeting in Washington this week for an annual conference, said they were concerned the shutdown would take a measurable toll on their economies. Individuals who aren’t receiving their paychecks or federal benefits are less likely to make purchases at the local level.

“It trickles down,” said Rick Kriseman, the Democratic mayor of St. Petersburg, Fla. “Them not receiving a paycheck means they can’t go into the community to a restaurant or a store and spend money, so those folks are impacted.”

“This president doesn’t seem to understand how far reaching this shutdown is,” Kriseman added. “It isn’t just that one person who’s not getting their check. Those tentacles really reach out much further than that, in so many different ways.”

The scope of the shutdown’s effect runs a startlingly wide gamut, between massive economic development projects and a single small business.

In New Bedford, Mass., Mayor Jon Mitchell pointed to the Vineyard Wind Project, which will soon become one of the world’s largest wind farms. But it is awaiting permits that must be issued by the Bureau of Ocean Energy Management, an agency in the Interior Department that has been shuttered for weeks. If those permits are not issued on time, the project risks losing tax credits that expire at the end of the year.

Mitchell also said fishermen in his community are waiting for an agency within the National Oceanic and Atmospheric Administration to approve this year’s plans for scallop harvesting, a huge part of the economy in America’s busiest fishing port. Failure to approve those plans on time, one boat captain told Mitchell, could result in $130,000 in lost revenue for one fisherman.

And while Trump and congressional leaders reached a deal to reopen the government, which Trump announced Friday from the Rose Garden, the continuing resolution will expire on Feb. 15, raising the prospect of another shutdown just as federal agencies spin back up.

Trump said Friday he hopes to have reached a deal with congressional Democrats by then over funding for a border wall. But those Democrats, having just forced Trump to back down, seem unlikely to cave. The cloudy future could place further cost burdens on cities that must now seek government funding to make up for what they have already spent.

“Uncertainty always plays a role in how much things cost,” said Michael Wallace, director of community and economic development at the National League of Cities. “The shutdown is driving up costs for cities.”

Wallace said the onus falls especially hard on small and midsize cities, which do not have the budget reserves or borrowing power of larger metropolises. A new shutdown, he said, puts those cities at considerable risk of losing money or facing closures and cuts.

The lack of a long-term deal will add to growing fears about a possible recession, some mayors said, putting an unnecessary brake on economic development.

“I’m most concerned about what this does with our economy. Dallas is on a very fast growth rate, the economy is hot,” Mayor Mike Rawlings (D) told The Hill. “People are just a little more shy, you see it in consumer confidence reports. That will hurt us.”