How will American cities avoid economic catastrophe?
As communities across our nation face challenges in containing the coronavirus pandemic, local leaders are being forced to make extraordinarily difficult choices due to unprecedented reductions in tax revenues and skyrocketing expenses, all while trying to keep our residents safe.
While we work together to address the ongoing public health crisis, the looming financial crisis facing municipalities like mine in Union City, Ga., and others is starting to take shape. Cities, towns and villages from all over the United States are facing unavoidable and catastrophic cuts to essential services.
Without a strong response and critical assistance from our federal partners, the national economic recovery we all want to see will be stalled indefinitely. Many cities — particularly those with smaller populations — will be left with few, if any, resources to help get our local economies back on track after the downturn caused by the pandemic.
By the end of this year, cities across my home state are projected to experience a revenue shortfall of 31 percent due to the COVID-19 pandemic, as expenses mount and tax revenues decline. In the meantime, municipalities throughout the country are beginning to see the fallout from these anticipated shortfalls, with 74 percent already making cuts and adjustments, 65 percent indicating they will have to delay or cancel planned capital expenditures and infrastructure projects and roughly one-third saying they will have to furlough or lay off local government employees.
Since mid-March, 47 million Americans have submitted first-time unemployment claims as workers, including local government employees, have lost their jobs due to the economic pause. It’s important to remember that these aren’t just numbers — these are our families and friends, members of our communities and many of our dedicated public servants. Without urgent federal aid, the number of people filing for unemployment benefits will continue to creep ever higher. Soon, municipalities will have no other choice but to lay off even more workers because, unlike the federal government, local governments like Union City must balance our budgets every year.
Moreover, the delay and cancellation of infrastructure projects that a majority of cities are facing will further cripple local job growth and business activity, hampering our ability to jump start a national economic recovery. Whether it’s construction of roads, bridges or hospitals, the people hired to complete these projects — and the local businesses that supply them — will essentially be left in limbo. Cities are desperate for the financial certainty we need to plan for job-creating, business-supporting expenditures in the coming months and years.
We need Congress to act, and quickly, before these forced budget cuts, layoffs and cancelled projects stall the safe reopening of our communities and drag down our nation’s economic recovery efforts. While there is some bipartisan movement in Washington, D.C., toward supporting our cities, such as the SMART Act introduced last month by Sens. Bill Cassidy (R-La.) and Bob Menendez (D-N.J.), there must be even more and in short order. If appropriate action isn’t taken soon, municipalities across the U.S. are facing more than $360 billion in lost revenues over the next three years due to the impact of COVID-19. Alarmingly, small cities with populations less than 50,000 will be among the hardest hit, with an overwhelming majority anticipating revenue shortfalls this year and half preparing to cut public services and reduce employment in their local governments.
Many of our federal representatives grew up in small towns — the communities that groomed them, prepared them and supported them each and every step of the way toward Washington, D.C. Most of our representatives were sent to fight on behalf of the small towns that raised them. Now it’s time for those same representatives to ensure municipalities across our country have the tools and resources they need to support the workers, families and businesses in their communities through this crisis. Together, we can restore economic prosperity and make sure the next generation of leaders has a fighting chance.
Vince Williams is the mayor of Union City, Georgia and second vice president of the National League of Cities (NLC). Follow him on Twitter @vrw11.