Dear California City Leaders,
Across the state, local leaders continue to focus on efforts to ensure their communities are doing their part to stop the spread of COVID-19, prepare for a surge, and plan for the gradual reopening of their local economies. At the League of California Cities, we are fighting to ensure every city has the resources they need to protect their communities. We know that, in times like these, it is also important to be able to connect with each other and the experts on innovative strategies for managing city finances and cost recovery, parking requirements, emergency orders, virtual meetings, affordable housing, and more. That’s why the League is hosting a special COVID-19-related webinar series on these topics. To view archives of these webinars and to register for upcoming ones, click here
A brief recap of important developments related to COVID-19 that you should know are below.
Let’s keep working together and make sure that no California city is left behind.
Carolyn M. Coleman
League of California Cities
Cities Left Out of Interim Emergency Spending Package.
Despite calls from city officials in California and nationwide, the Senate passed a $484 billion spending package yesterday that failed to include direct and flexible aid to local governments of all sizes to help address the revenue shortfalls and increase in expenses due to COVID-19. Following the Senate vote, Senator Chuck Schumer (NY) said that robust funding for state and local governments was at the “top of the list” in a fourth package. House Speaker Nancy Pelosi (CA), who also spoke after the Senate vote, called [yesterday] a “great victory” but said more would be done for state and local governments in the next bill. Pelosi said money from the CARES Act would be used to backfill lost revenue and pledged that additional money for state and local governments would be included in a final fourth package. On Twitter, President Donald Trump said: “After I sign this Bill, we will begin discussions on the next Legislative initiative with fiscal relief to State/Local Governments for lost revenue from COVID 19.” On the other hand, Senate Majority Leader Mitch McConnell (KY) is signaling that he will not support a quick pass on phase four, saying that more funding will not solve the "problem" created by the rapid spread of the coronavirus. He said, "I think it's also time to begin to think about the amount of debt we're adding to our country and the future impact of that... until we can begin to open up the economy, we can't spend enough money to solve the problem." The House is expected to take up the Senate-passed legislation on Thursday, and the President is expected to sign it. Discussions on a next package are expected to start shortly.
Until then, the League is continuing to push H.R. 6467, the Coronavirus Community Relief Act,
and urging California House members to co-sponsor this bill. H.R. 6467 would provide $250 billion in direct aid from the federal government to local governments with a population less than 500,000 as they face mounting challenges related to the pandemic. If you haven’t already, please contact your U.S. House member and urge them to support this legislation. A sample template letter is available here
The League will continue to tell the city story and make the case for direct and flexible federal aid for cities of all sizes. None of our cities should be left behind.
Assembly and Senate Budget Committees Focus on State COVID-19 Response.
The Senate Special Budget Subcommittee on COVID-19 Response met last week and the Assembly Special Budget Subcommittee met earlier this week for a budget overview of the state’s response. Both hearings highlighted the magnitude of the state’s COVID-19 response and the costs associated with it. The Department of Finance is estimating that the state will spend $7 billion in 2020 on its COVID-19 response and is projecting that 75 percent of this amount ($5.25 billion) will be reimbursed by the federal government. There is great interest in how the pandemic will impact the state’s reserves, but new estimates for available funds in the Rainy Day Fund will have to wait until Gov. Gavin Newsom’s May Budget Revision is released next month. As far as budget allocations so far, in March the Legislature provided the Governor up to $1 billion in funding to respond to COVID-19; he has allocated approximately $650 million, thus far. The Governor has also transferred $1.3 billion to the Disaster Response Emergency Operations Account, which can be used to respond quickly to emergencies, like COVID-19, bringing its balance to $1.4 billion. In terms of funding on-going expenses associated with COVID-19, California received approximately $26 billion in the first three federal stimulus packages, and the Administration is developing a plan for using the state’s share. The state may also consider payment deferrals, shifting payments, and borrowing from specials funds to access additional resources in the short-term; the League will be monitoring these activities closely to ensure no local dollars are grabbed. The Governor has also reached out to House Speaker Nancy Pelosi requesting $1 trillion in direct and flexible relief be provided to states and local governments in the next federal stimulus bill.
In general, lawmakers were supportive of the Governor’s quick actions to contain and mitigate the spread of this deadly virus; however, it appears they want and expect more oversight and transparency going forward. There is also a growing concern regarding the availability of resources to help local governments address the impact of COVID-19 on their communities. The Department of Finance representative who testified in the Assembly’s hearing, acknowledged their awareness of the fiscal issues cities are facing. In the coming weeks, the League will make sure the state is aware of the full extent of the fiscal impact of COVID-19 on local budgets and the scale of resources needed to address the revenue shortfalls and increased expenses due to COVID-19.
Governor Announces Recovery Taskforce.
To chart a path forward on recovery in the wake of COVID-19, the Governor recently announced a new taskforce
for Business and Jobs Recovery, which includes leaders from California’s economic and social sectors. Since recovery can only be realized at the local level, we are working to make sure the local government perspective is considered as part of the taskforce’s efforts.