Coronavirus Takes its Toll on Michigan Cities, Large and Small
Around the nation, cities are facing major financial pressures, and the situation will only get worse as the COVID-19-forced shutdown of society continues, and the impact of the virus lingers.
The Washington Post recently included Grand Rapids in its roundup of what is happening to city budgets around the nation. And here’s a related post in mlive.com today.
An excerpt from the Washington Post article, referencing Grand Rapids’ challenges, which are not unlike all communities in Michigan:
More than 1,100 miles to the north, Mark Washington said he’s confronting similar economic headaches. With the economy at a standstill — and tourism to the craft beer destination fully disrupted — the city manager of Grand Rapids, Mich., said sales and local income taxes are dwindling. The shortfall could end up being 5 to 15 percent of the general operating budget or “maybe even more,” he said.
On the table soon could be cuts to city programs or possibly furloughs or job cuts, something Washington said he didn’t want to do — not the least because Grand Rapids hasn’t returned to the staffing levels it had before the 2008 recession. For now, he said, he needs the federal government to make a “direct infusion into our city.”
Around the nation, other cities are seeing similar problems:
“I do think cities across the country are looking at some degree of austerity,” said San Antonio Mayor Ron Nirenberg (I), who predicts his municipality will face as much as a $100 million shortfall. “This is a reckoning for us.”
Local residents aren’t shopping or traveling, as they heed orders to stay at home, contributing to major gaps in city and state incomes. Meanwhile, the normally reliable bonds that states, cities and counties issue to fund projects or make up for lost revenue are becoming less attractive to investors, jeopardizing local governments’ efforts to offset the costs of a deadly pandemic. AD
The result could be massive budget cuts along with layoffs or furloughs of city and state workers around the country, many local leaders fear. In response, federal officials have sought to stanch the bleeding: On Thursday, the Federal Reserve and the Treasury Department announced a new $500 billion effort to purchase short-term debt from states and large cities and counties. But many cities, particularly smaller ones, won’t qualify for the assistance. Democratic lawmakers are also looking to direct more dollars to states and cities, but that effort has gotten bogged down in the Senate.
The piece was written by Tony Romm, with contributions by Darran Simon, Patricia Sullivan and Erin Cox. These are unprecedented times we are in, and as we work together to protect the health of our residents, we need to be aware of the disruptions in important and vital services that our communities will face – and begin thinking of how we can move toward recovery and making our cities the kinds of places residents deserve and newcomers seek.