Giles was speaking by telephone from Mesa and said he could see from his window a long line of cars waiting to receive a 50-pound package of food to help feed their families. He said this has been a weekly scene every Friday for most of the past year.
“The talking point that people latched onto was this is a bailout for irresponsible blue cities and states,” he said. “They didn’t think about it other than regurgitating that argument. Every time I heard that, I said to them, ‘Please tie all the strings you want to it.’ I can tell you, in my community, none of this money is going to compensate for poor decisions of the past. One hundred percent will go directly to covid-related assistance.”
They noted that they had carefully managed the money their cities received last year from the Cares Act and would do so with any new funding. “As mayors, we need Congress to understand that we will treat this new American Rescue Plan funding with the same respect,” they wrote. “We also need them to understand it is a necessity for states and cities.”
“The city of Phoenix began 2020 with a budget surplus,” Gallego said Friday. “We were working very hard on our finances. Then they fell off a cliff, as did many others. We made some hard decisions to get through this, but we hope that Congress understands that we take financial management very seriously.”
The new bill will provide states with $220 billion, major cities about $45 billion, smaller cities and towns not quite $20 billion and counties $65 billion. Of major cities, New York will receive the most, about $4 billion, but it faces a $10.5 billion shortfall in revenue. Even the smallest towns will receive some assistance.
As the stimulus package debate was roiling Congress, opponents of state and local aid seized on a report from the Tax Policy Center that showed state revenue overall had fallen by just 1.8 percent during the pandemic. On top of their claims that aid would help irresponsible Democratic-run cities and states, opponents read the report and concluded that the funding wasn’t really needed.
Lucy Dadayan, a senior research associate at the center, sought to put the findings into context in an article on the center’s website. She called the arguments that states and cities didn’t need money “simplistic.”
“While some states have enjoyed better than expected revenues, other states have not,” she wrote. “And local governments have suffered even more. At the same time, all units of governments have had to spend significantly more to respond to the pandemic.”
A new report from the center shows that states are still “a long way from digging out of their COVID-19 budget holes,” according to an article by Richard C. Auxier, a senior policy associate.
There is no good data on how much city revenue has been affected by the pandemic to go along with the state data. The reason, Dadayan said, is that there are simply too many units of local government to make collection of that data efficient.
But mayors can tell you what happened to their cities. Mayor Stephen Benjamin (D) of Columbia, S.C., said revenue was down about $30 million. “We cut the budget midyear to reflect that,” he said.
Mayor Nan Whaley (D) of Dayton, Ohio, said her city, like others in Ohio, depends heavily on an earnings tax for its revenue. “If people work, we get money,” she said. “That has taken a pretty significant hit.”
Those revenue streams were down about 8 percent last year, she said, and are estimated to be down about 10 percent this year. Dayton’s workforce has shrunk, creating operating challenges. The number of police officers has declined through attrition. Without the coming federal funding, Whaley said, the city would not be able to pay for a new crop of police recruits to replace those who have left the force.
Mayor Michael Hancock (D) of Denver said his city took a $190 million revenue hit last year and expects to see another $220 million hit this year. The pandemic decimated tourism, a prime revenue source, and restaurant closures also caused a drop in sales tax revenue.
“This was not a failing city,” Hancock said, noting that on his watch, Denver kept reserves of 15 percent set aside for times of stress. Without those reserves, the pandemic would have put Denver in serious trouble. “This is not a partisan issue for mayors,” he said. “This is a fiscal issue for mayors.”
Hancock offered another argument for sending aid to local governments. “Cities represent over 90 percent of GDP,” he said. “If cities do not recover, there is no national recovery. Congress ought to have been focused like an eagle in saying we need to make sure our cities and metropolitan regions get a jump-start.”
As with the collaboration between the mayors of Phoenix and Mesa, Hancock joined with Mike Coffman, the Republican mayor of neighboring Aurora and a former member of the U.S. House, to write an op-ed in support of the new legislation.
“As mayors of two of the three largest cities in Colorado — one Democrat and one Republican — we don’t see eye to eye on every issue, but we’re united about this: Coloradans need urgent relief, and the American Rescue Plan is the right package for this time,” they wrote.
Declining revenue is only a part of the problem for cities. The economic impact of the pandemic forced cities to respond with programs for which they hadn’t budgeted.
“We converted the convention center into a food bank,” Giles said. “We didn’t used to be in the eviction-prevention business or the utility-assistance business. We weren’t giving out small-business grants. We weren’t partnering with schools to give out laptops to [needy] students. We’ve been asked to do a lot of things that wasn’t in our job description.”
Gallego said the money Phoenix will receive “will allow us to continue essential operations and help those hit hardest by covid-19. Many of our lowest-income residents have seen the most devastating cuts. People who lost jobs are having trouble meeting basic necessities.”
Mayors decried the partisan environment that they said seems to infect every debate in Washington and said the view from ground level outside the nation’s capital about conditions and need is far different — and one that is confirmed by polls showing support for the new legislation.
Bryan Barnett, the Republican mayor of Rochester Hills, Mich., and a supporter of the legislation, said at least two dozen GOP mayors had signed a letter urging Congress to pass the bill. While acknowledging that represented a minority of Republican mayors, he said the support was notably greater than among Republican governors or members of Congress.
“To me,” Gallego said, “it does feel that in Phoenix the support [for the bill] is very bipartisan among our residents.”