'We need help': Small cities face fiscal calamity from virus

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A cyclist pedals up a hill in Allentown, Pa., Friday, May 29, 2020. Allentown predicts a budget deficit of over $10 million, a number officials say could go higher if the economy doesnt rebound quickly. (AP Photo/Matt Rourke) (AP Photo/Matt Rourke)

ALLENTOWN, Pa. – ALLENTOWN, Pa.Unfilled potholes, uncollected trash, unmown grass and, most significantly, fewer police on the street are some of what Allentown says it’s contemplating unless Washington helps it plug a multimillion-dollar budget hole left by the coronavirus pandemic.

Pennsylvania’s third-largest city, with a population of over 120,000, Allentown has largely fended for itself amid sharply falling tax revenue. It's one of thousands of smaller cities and counties across the U.S. that were cut off from direct aid in the $2 trillion coronavirus relief package passed by Congress in late March. Local officials in those left-out places are now pleading for a massive cash infusion from the federal government to help them stave off financial calamity.

“We represent the average city. If cities like Allentown begin to crumble, that’s how America crumbles,” said City Council member Ce-Ce Gerlach. “So something needs to be done. We need help.”

The federal CARES Act sent $150 billion to states and the nation’s most populous cities and counties to help them pay for expenses related to the virus outbreak. But only 36 cities met the population threshold of 500,000 or more to qualify for the money. With the next round of aid stalled in Congress — and no guarantee of a federal bailout anytime soon — Allentown and other local governments are facing tough choices about what to cut and what to keep.

Already, cities are dipping into reserves, canceling road projects, postponing routine maintenance, cutting parks and recreation programs, and furloughing staff. State and local governments have shed more than 1.5 million jobs since the beginning of March, the U.S. Labor Department reported last week. The National League of Cities says municipalities could be looking at $360 billion in red ink through 2022.

“I am hearing from our members all across the country that every day that goes by, the situation is increasingly dire,” said Irma Esparza Diggs, the group’s chief lobbyist.

That’s especially true in Pennsylvania, where cities and towns could see a 40% revenue shortfall — the most of any state, according to a League of Cities analysis.

Allentown predicts a budget deficit of over $10 million, a number officials say could go higher if the economy doesn’t rebound quickly. Like other local governments, Allentown has already been paring back. The city furloughed as many as 87 people out of a work force of 783, and all city department chiefs were ordered to slice another 7% from their budgets, including for police, fire and emergency medical services.