No Help For Struggling LA — And Other Cities — In Congress' COVID-19 Deal

Congress’ $900 billion COVID-19 relief package includes direct payments to many Americans, a federal boost to weekly unemployment checks, and assistance for small businesses and schools.

Missing from the bill: financial help for struggling local governments. The news dashes the city of L.A.’s hopes for further help this year with its projected $675 million budget shortfall.

Elected officials in Los Angeles blasted the deal -- the result of months of back-and-forth wrangling betweeen party leaders.

“There's nothing in this package that helps cities replace the ruinous, devastating revenue loss that we've suffered since March," said Councilmember Paul Krekorian, chair of the city’s budget and finance committee. "It's just a complete abrogation of responsibility by the federal government.”

“I’m hopeful that — as President-elect Biden said — this is a down payment. Because this is not enough,” said Councilmember Bob Blumenfield, vice chair of the committee. “Given the very harsh realities that cities across the country are facing, we need assistance.”

Earlier this month, the city council approved a plan to bridge the gap, including cuts to nearly every department, borrowing to pay for day-to-day expenses and spending down the rainy day fund to the lowest amount allowed by the city charter.

The council also opened the door to hundreds of potential layoffs, including 355 police officers and 273 civilian LAPD employees.

Blumenfield said the city is trying everything to avoid cutting workers, but Congress sent a different message.

“What they’re telling us is they’re ok with layoffs of public safety and essential workers,” Blumenfield said. “That’s not where we should be.”

Without help from Congress, Krekorian said, L.A. must find some way to save personnel costs. The city is negotiating with labor unions on steps like delaying or reducing planned raises.

"Those sorts of things are much preferable solutions to any layoffs," Krekorian said.

Los Angeles has already used nearly all of its $700 million slice of the previous relief bill on things like rental assistance, emergency homelessness spending and direct COVID-19 response — including standing up testing sites and providing city workers with personal protective equipment.

Democrats had hoped to secure $160 billion in local aid into the new bill as part of a compromise with Republicans who wanted provisions to shield businesses from liability. But Majority Leader Mitch McConnell nixed the deal. He’s previously called the idea a “blue state bailout” — a characterization Blumenfield rejects as “tone deaf and ignorant of today’s reality.”

States with Republican governors are facing some of the largest budget shortfalls, Blumenfield pointed out.

There is a glimmer of hope from an unlikely source: Sacramento. The state may benefit from a $12-40 billion tax revenue windfall this fiscal year. (Why? While average workers have battled through a difficult 2020, the top earners in California with lots of money in the stock market flourished.)

“My hope is that if the feds are failing to look after cities across the country, that at least perhaps our state will look at the cities in its jurisdiction and try to lend some assistance,” Blumenfield said.

(Monday 6:10 PM: This story was updated with comments from Budget Chair Paul Krekorian)

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