MIAMI – Last summer there was notable friction between counties and municipalities over Cares Act money.
Back then, federal guidelines said only communities with 500,000 residents or more could receive the funds. Now, the latest COVID-19 relief package includes direct aid to smaller municipalities of a population threshold of 50,000 or more, which could prevent a tax hike, save jobs, pay employees and maintain core services like trash pick-up.
The bills is expected to go before the U.S. House of Representatives for final passage on Tuesday.
Local 10 News’ Christina Vazquez spoke with the National League of Cities, and they are urging federal lawmakers to keep the direct aid to local governments in place.
From Weston city attorney Jamie Cole to Miami Beach Mayor Dan Gelber, local leaders are working to explain how the injection of direct aid to cities will help resident taxpayers.
“Cities in Florida are required to balance their budget, so unlike the federal government, cities can’t run a deficit and need to make sure they have enough revenue to pay off their expenses,” said Cole. “As the result of the pandemic, cities have received less revenue in the forms of gas tax and tourist taxes and ultimately property taxes even though housing prices seem to be going up. The assessed values for office buildings and hotels will most likely go down so cities are going to be facing a loss of revenue. At the same time, cities have had a large amount of expenses. They have had to buy PPE for police and fire, so cities have had substantial expenses and loss of revenue, and because they can’t deficit, spending is the only way to make that up. If the federal government hadn’t come through, would have been to increase taxes.”
Said Gelber: “Cities did different things to figure out how to get through this.”
The National League of Cities, or NLC, has been tracking the financial impacts to local budgets of COVID-19, from case mitigation expenses to substantial revenue losses.
“COVD was a huge shock to the economy,” Gelber said. “And certainly for a place that is so dependent on the hospitality industry, which is one of those industries that was hurt the most I think, you saw cities like mine and others really take hits to revenue.”
Unlike the federal government, municipalities need to balance their books.
“A lot of us went into reserves, some people stopped hiring and let positions infilled, some people took furloughs, we did a lit bit of all of that and what this will do is allow us to get our financial footing,” said Gelber.
As cities headed into this fiscal year, they faced grim options and drive-up earned revenue, which for a city means hiking fees and taxes or cutting expenses by pulling back on services or laying-off staff, to include first responders.
The NLC identified that “public safety” was “on the line.”
Because of the pandemic we have had an enhanced need for law enforcement,” said Gelber. “We have been paying for a lot of this stuff with the possibility of a reimbursement but without the guarantee.”
Moody’s Analytics’ Chief Economist Dr. Mark Zandi explained that, “The money going to local government goes to essential services, we need protection, firemen, we need trash cleanup, basic water and sewage services, these are necessary things, not luxury.”
Said Cole: “That will enable cities to continue to provide services, enable cities to prevent layoffs and furloughs, enable cities not to increase taxes. So the average resident will continue to see a continuation of all of those services without an increase in taxes.”
That’s if it remains in the bill that now goes before the house Tuesday.
“Everyone has suffered through this and hopefully we have a light at the end of tunnel and hopefully we will be able to see our way through it,” said Cole.
At last check, Florida was set to receive $17.3 Billion in the American Rescue Plan.