Counties Say They Need More Federal Money To Stay Solvent Amid Coronavirus Shutdowns
County leaders across the country are asking the federal government for more emergency aid money as they watch tax revenues sink because of the coronavirus shutdown.
The federal CARES Act passed last month includes $150 billion in direct aid to states and cities, with some caveats. Local governments with populations above 500,000 people get the money directly. Those that are smaller can only receive funds that are funneled through their state. The National Association of Counties said that leaves smaller counties "at the mercy of the states—who are dealing with their own fiscal pressures." The group has sent a letter to President Trump asking him to support efforts to channel money directly to all counties.
County officials say another major problem is that CARES Act funds can only be used for the costs of responding to the pandemic, not to backfill lost revenue because of the economy's shutdown. County governments describe themselves as being on the front lines in the fight against the coronavirus and many are now facing massive budget deficits.
In New York, Westchester County Executive George Latimer said the loss of sales tax and property tax revenues will take between $90 million and $160 million from the county's $2.1 billion budget. Other nearby counties are in similar shape, he added. "We're going to need the federal government to be there in a significant way," he said, "unless we intend to see a collapse of the New York metropolitan area economy."
In Los Angeles County, Chief Executive Officer Sachi Hamai said, "Los Angeles County's fiscal outlook has been significantly impacted by COVID-19 and we project it will have a major effect on the programs the county administers on behalf of our 10 million residents." Hamai said she believes sales tax revenues will be down 50 to 75 percent for the next few months and will be 25 percent lower over the next fiscal year. Altogether, that is expected to be a $2 billion loss in sales tax revenue. That's money, Hamai said, that is vital in funding child welfare, care for the homeless and other social services.
Some counties have begun announcing layoffs and furloughs. In Los Angeles, Board of Supervisors Chair Kathryn Barger said the county ordered a hiring freeze more than a month ago. It's now asking county departments to develop plans for a possible 25 percent budget cut.
To help with these looming deficits, the National Association of Counties said some relief might be included in a new coronavirus package now taking shape in Congress. Democrats are pushing for it to include an additional $150 billion that counties can use to cover lost revenue.