City officials are working around the clock to protect residents, maintain key services, and safely reopen their economies, while simultaneously facing heavily impacted budgets. How are cities coping with the pandemic, and what does the pandemic mean for jobs, services, and an inclusive economic recovery?
On Sept. 28, League Executive Director Carolyn Coleman; City of Chattanooga, Tennessee Mayor Andy Berke; and former City of Philadelphia Mayor Michael Nutter discussed how cities are navigating these challenges on the Urban Institute panel “State of the Cities 2020: Leading through a Pandemic.” Tracy Gordon, Senior Fellow of the Urban-Brookings Tax Policy Center, moderated the discussion.
Prior to the pandemic, city revenues were finally returning to pre-Great Recession levels with reserves and positive trends, Coleman shared at the start of the panel. When COVID-19 hit, the fiscal impact of these swift changes were felt immediately by cities.
Coleman shared highlights from the National League of Cities’ recent City Fiscal Conditions Report
, highlighting that nearly 90 percent of cities will be less able in FY 2021 than in FY 2020 to meet the fiscal needs of their communities. On average, cities are anticipating a 13 percent decline in FY 2021 general fund revenues over FY 2020.
Coleman also shared findings from the League’s data analysis
, highlighting that by April 2020, California cities were already calculating a $7 billion revenue shortfall over two years in their general funds due to COVID-19. “The revenue shortfalls are having real consequences,” Coleman said. “With balanced budget requirements and revenue raising restrictions, cities have no choice but to cut services, lay off workers, freeze hiring and rollback capital projects.”
Coleman continued, “Every dollar that a city spends funds a salary or funds a service that the community has prioritized as something that it needs. When we take away the dollar, we take away the person or the contractor that delivers that service. Those are the folks that are at the heart of our communities. It’s not just about the dollar, it’s about the people behind the dollar.”
Mayor Berke from Chattanooga shared that prior to COVID-19, his city prided itself on its hospitality industry, and its reputation for creating “magical moments” for visitors. However, in a COVID environment, Americans’ behaviors are changing, which will have lasting impacts on city economies dependent on tourism.
“Before the pandemic, we had built up reserves and had great plans for creating magical moments in Chattanooga. But six months ago, we had to relook at our plans. As we continue our spectacular projects, such as parks and transformative spaces, we have to think about how people will use these spaces. It may be a long time before we feel safe to go into large crowds,” said Mayor Berke.
Mayor Nutter compared his experiences as a mayor during the Great Recession to the COVID-19 pandemic, noting that the pandemic is a “series of bad options” for city leaders. “How do you protect public health and safety, support local business, and continue to provide services in the middle of a recession?”
The panelists also highlighted that before the COVID-19 pandemic, mayors and city council members were taking on equity challenges such as housing affordability, homelessness, and unequal access to jobs and economic opportunity. But, the current public health emergency has worsened these challenges, particularly for people of color.
“COVID-19 has forced out in the open the inequity that people of color experience at so many levels – health, economic, treatment by institutions – and when it all happens at the same time, we can only hope that this is the time that Americans decide no more. Racial equity must be one of the driving components moving us forward from where we are right now to make changes and achieve that balance that is long overdue. This isn’t a moment. It must remain front and center,” said Mayor Nutter.
While cities are doing the best that they can under incredible circumstances, the panelists agreed that our communities, and our country, will not recover without federal government support to cities.
“Cities right now are facing a global pandemic, economic crisis, a reckoning of 400 years of racial injustice, and all the psychological issues of all of this happening together,” said Mayor Berke. “This will only be worth it if we come back better and stronger, but we cannot do this without a strong federal partner. Cities can’t raise enough revenues at the city level to address these multiple crises. We can’t revenue our way out of this. We need federal support.”
“The nations GDP doesn’t rebound unless our cities do,” said Coleman. “Cities are the economic engines of our country. Cities are where innovation happens in our country. Cities are the places where 80 percent of our residents reside. In times like these, cities need the federal government to step up and provide assistance. It’s the smart thing to do, and it’s the right thing to do.”
A recording of the panel, and more information about the panelists, can be found on the Urban Institute’s website