Cities May Face Dire Budget Choices If They're Ignored In Federal Bailout, Leaders Say
Leaders of small and mid-sized cities, including in Southern California, say they are being overlooked in federal coronavirus bailouts — and it's forcing them to consider drastic steps to balance their budgets.
The CARES Act, the $2.3 trillion federal stimulus package passed by Congress last month, includes $150 billion for direct help to state and local municipalities hit hard by the COVID-19 pandemic.
But to apply to the Treasury Department for aid, cities must be one of 36 metros nationwide with populations over 500,000.
Los Angeles fits that bill, but California cities like Bakersfield, Anaheim, Santa Ana and Riverside do not. Their leaders have to appeal to Sacramento for a piece of the state pie.
Officials who are on the ground directing coronavirus response at the city level say that's not good enough.
"As local leaders we are facing an unprecedented crisis with the COVID-19 pandemic," said L.A. City Councilman Joe Buscaino, who is president of the National League of Cities. The organization held a conference call with mayors and members of city councils all over the country asking for the feds to tweak the relief package.
"This is our message: we need direct funding for cities of all sizes."
"It's reprehensible and inexcusable that every other city that's below 500,000 in population [is] currently not given direct funding," Buscaino said.
Thousands of cities around the country are turning to program cuts, worker furloughs and layoffs to deal with plunging revenue since coronavirus brought local economies to a screeching halt, according to a new survey released by the National League of Cities and personal testimony from mayors on the call.
Many are also dialing back infrastructure projects — water, sewer and road improvements — or putting them on hold indefinitely.
Economic activity makes up a large chunk of cities' funding. In L.A.'s case that includes sales taxes, hotel fees, even parking tickets. Stay-at-home orders and social distancing have blasted a hole in those sources of revenue.
So how bad will it be? Los Angeles City Controller Ron Galperin's office said he will release revised revenue estimates this week.
"This pandemic has caused us to have to look every single day at revenues," L.A. Mayor Eric Garcetti said at his Tuesday evening briefing. "There's no question though, that we are going to have cuts."
Last month, San Francisco leaders said that city's shortfall could climb to as high as $1.7 billion.
The fiscal year ends June 30. A new year — and a new budget — starts up July 1.
Under the city charter, Monday April 20 is the deadline for Garcetti to submit a proposed 2020-21 budget to the city council. The council must adopt it, or adopt with modifications, by June 1.
During the briefing, Garcetti asked Congress and President Trump to bail out cities in the next round of COVID-19 funds.
"Cities around the country and local governments as well as state governments will go off a fiscal cliff without assistance from Washington," Garcetti said.
11:30 PM — This story was update with comments from L.A. Mayor Eric Garcetti.
Read the full National League of Cities and U.S. Conference of Mayors Survey: