Nearly 100 Texas mayors have signed a letter requesting Congress provide additional federal relief to help shore up municipal budgets that have been ravaged by the COVID-19 economic shutdown. Back in May, Dallas got a look at how the economic shutdown would affect city revenues, with city staff predicting a $25 million budget shortfall as well as sharp declines in hotel occupancy tax, aviation revenue, and other enterprise funds.
Since then, the Texas comptroller has reported an 11 percent decline in sales tax revenue across the state, and lockdowns, reopenings, and surges have only made the outlook more unsure. The 97 Texas mayors who signed the letter to the state’s congressional delegation say the $11 billion Congress allocated to Texas cities in the last federal stimulus bill was not enough to deal with such a huge drop in revenue.
According to a report in the Texas Tribune, Arlington mayor Jeff Williams spearheaded the lobbying effort. Arlington is a perfect example of how the COVID-19 pandemic — and the limited federal response — has left many local governments high and dry. Arlington is looking at around a $20 million shortfall because of the shutdown — close to Dallas’ own $25 million projected revenue shortfall, despite the fact that Arlington has one-third the population of Dallas. That large deficit is a reflection of how dependent Arlington’s municipal revenue is on the city’s entertainment-driven economy.
Earlier this year, Congress passed the CARES package, which included some financial support for local municipalities, but there were strings attached. Direct funding to municipalities was only provided to cities with populations over 500,000. Smaller cities, like Arlington, would have to rely on CARES funding provided to counties and the state.
In addition, according to the language of the CARES package bill, the federal stimulus money could only be used for expenses incurred in direct response to COVID-19, like testing. But the pandemic shutdowns have led to a huge decline in sales tax that will affect municipalities’ ability to meet basic budget obligations. Later, treasury department guidelines appeared to loosen those conditions, but there is still confusion over how CARES dollars can be spent.
Williams told the Texas Tribune that Congress should fund a second COVID-19 stimulus package as they would any natural disaster relief bill.
“This virus is a natural disaster, just like a hurricane, tornado or flooding. And so consequently, we’re requesting aid for emergency services and medical relief, but then also help rebuilding our city as a result of the virus, just as you would if we had had a major flood or tornado,” he said.
The mayors who signed the letter include representatives from all of Texas’ major cities, as well as the leaders of suburban and rural communities. They fear that without a federal bailout, the economic fallout could stretch on for years and snowball.
“The budget calamity looming over local governments is real and it requires extraordinary measures,” they wrote. “We therefore fear that state and local revenue is going to take time to rebound. We also fear that if we do not stabilize our economy, we could see a drop in property tax revenue next year.”
There is a stimulus bill in front of Congress. Before the summer recess, the House passed a package that would send $1 trillion to local governments. According to NPR, the measure is stalled in the Senate, in part, because of disagreements over local government relief.
Here’s the full Tribune report.