https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
    • Latest videos
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE 2022
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

Administration


Pixabay

News

As the pandemic continues to loom, municipal leaders can glean lessons from last year’s budget season

As the pandemic continues to loom, municipal leaders can glean lessons from last year’s budget season

  • Written by Andy Castillo
  • 23rd July 2021

With numbers ticking ominously up in recent days, municipalities across the nation are once again bracing for a new wave of COVID-19 infections and everything that comes with it. Over the last year, governments have been forced to adapt shrinking budgets quickly to address shortfalls and free up spending for pandemic-related expenses. 

A study conducted by The Pew Charitable Trusts looking at budgets in Philidelphia and 12 other municipalities found that, “In planning for fiscal 2021 last spring, officials in these cities projected budget shortfalls ranging from 1.9 percent to 17 percent of the prior year’s general fund adopted budget. Philadelphia estimated its shortfall would be almost 15 percent, roughly $749 million.” 

Governments particularly dependent on revenues generated by taxes might have seen a sharp ebb in revenue streams during last year’s economic downturn, as would be expected given the circumstances globally. 

Then there are the unexpected expenses that came with combating the coronavirus: Since the start of the pandemic, the federal government has expended $3 trillion so far in its response of an allotted $4.5 trillion in total budgetary resources, according to usaspending.gov, an open source portal that tracks spending. 

Given what’s been learned over the last year, as COVID-19 numbers begin to rise once again—new cases are up nationally 180 percent over last week as of Friday, based on data compiled by the New York Times—local and county governments can be a little more prepared to deal with an uncertain pandemic-driven economy then they were last year. 

As regions simultaneously emerge from one wave and prepare for the possibility of another, “many communities are embarking on a needs assessment and community engagement,” said Christiana McFarland, research director at the National League of Cities.  

In coming days, “being able to have a strong handle on priorities of the city” will better prepare local leaders to efficiently divert resources, especially during a time when budgets are tight. Especially in communities that don’t have the ability to create space in their budgets because of state laws, it’s important to think through potential solutions before problems arise. 

Typically, the flexibility of a local government’s budget “contingent on how the state allows them to do their budgeting and financing,” McFarland said. “In some states, cities have access to the sales tax to apply to infrastructure projects. In other cities, they have to go to the residents and ask if they can apply (the revenue).” 

If more money can’t be raised through taxation or other means, line items need to be cut. And when the pandemic was first being realized last year, McFarland says municipalities across the nation pivoted quickly to create space in their budgets in order to respond to evolving needs within their communities.  

“A key mechanism we saw was delaying or canceling infrastructure capital projects,” she said, noting that given the “Ongoing costs, there was just so much uncertainty.” 

At the state level, there are a few steps legislatures can take to help local leaders better respond. An analysis of local tax limits released by The Pew Charitable Trusts July 8 recommends that states loosen taxation restrictions “to give local officials more options for responding to extraordinary fiscal challenges, including recessions and natural disasters.” 

Specifically, the study notes how state-imposed limitations on “the growth of local tax property revenue” can limit the ability of municipal leaders to meet community needs during a crisis.  

An increase in taxation is unpopular among taxpayers, especially among lower-income households that rely on real estate for the majority of their wealth, the study continues. And because of that, many states have imposed caps on how much localities can raise yearly rates. But on the other side of the equation, municipalities rely on taxation to pay for public services. And when the pandemic settled in last year, there was a dramatic increase in the role of government to combat the crisis—at the same time, budgets generally slumped across the board. 

In looking to future recover efforts, the study continues, “States can give their localities more room to maneuver by temporarily lifting certain revenue restrictions—on a case-by-case basis or in reaction to a recession or natural disaster.” 

Notably, some states have already implemented this idea. 

“Governor Phil Murphy signed legislation in August 2020 to allow New Jersey’s local governments to borrow for pandemic-related expenses and back those bonds with property taxes that do not have restrictions,” the report says. 

And in Ohio, McFarland highlighted another forward-thinking solution. As a state that’s “heavily reliant on income taxes,” she said, “Typically, cities levy an income tax on people that work in their cities.” 

At the pandemic’s height last April, 70 percent of American workers punched in from home-offices, according to a recent Gallop poll. Adjusting to the loss in revenue as everyone left offices in the city, Ohio’s government allowed local municipalities “to levy taxes on remote workers,” McFarland said. “That was a temporary measure, but it’s being debated right now.”

Tags: homepage-featured-1 homepage-featured-4 Administration News Administration Economy News News

Most Recent


  • When spending federal stimulus dollars, local governments are considering long-term, community impact
    From staffing constraints to budget shortfalls and an unprecedented pivot into the digital realm (driven by the pandemic), local governments have confronted myriad challenges over the last few years. But in this, there’s a bright spot: The federal government is investing an unprecedented amount of money into local governments. “The covid pandemic shuffled the deck […]
  • Reno, NV
    In Nevada county, data underpins efforts to address climate change
    Across the United States, cities and counties are doing their best to confront climate change in myriad ways—from bolstering seawalls to updating electrical grids and everything in between. But in order for communities to best direct their efforts and responsibly spend hard-earned taxpayer dollars, administrators need data. In Washoe County and Reno, Nev., for example, […]
  • $52B semiconductor investment intended to rejuvenate American manufacturing
    Three decades ago, American manufacturing dominated the semiconductor industry, producing about 40 percent of the global supply annually. But over time, companies shipped business overseas looking to cut costs, and today, the nation produces only 10 percent of all semiconductors. It’s something the Biden Administration is trying to change through CHIPS and Science Act. “There […]
  • How capital improvement project prioritization helps secure infrastructure funding
    Trillions of dollars in federal infrastructure funding have been made available to state and local governments across the U.S. since early 2020. This money has been allocated to address the nation’s aging infrastructure, much of which is at or near the end of its useful life, and to bolster the U.S. economy in the wake […]

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Industry and government collaboration key to addressing recycling challenges
  • dollar bill single
    Local government relief: common sense solutions for revenue, technology and funding during COVID-19
  • The rocky road ahead

White papers


Modern American Perspectives on Law Enforcement

14th July 2022

Reimagine the Employee Experience

12th July 2022

How to Assemble a Rockstar Website Redesign Steering Committee

7th June 2022
view all

Events


PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

Twitter


AmerCityCounty

When spending federal stimulus dollars, local governments should consider long-term, community impact dlvr.it/SWXJWZ

12th August 2022
AmerCityCounty

In Nevada county, data underpins efforts to address climate change dlvr.it/SWTGHy

11th August 2022
AmerCityCounty

$52B semiconductor investment intended to rejuvenate American manufacturing dlvr.it/SWPqHQ

10th August 2022
AmerCityCounty

How capital improvement project prioritization helps secure infrastructure funding dlvr.it/SWLQB7

9th August 2022
AmerCityCounty

Climate bill lauded; predicted to reduce nation’s carbon foot print by 40% within decade dlvr.it/SWHGQL

8th August 2022
AmerCityCounty

Partnership launches no-cost wastewater monitoring service for local governments dlvr.it/SW7N74

5th August 2022
AmerCityCounty

Investing in America’s onsite wastewater treatment systems for equity and sustainability dlvr.it/SW4Mb9

4th August 2022
AmerCityCounty

With passage of PACT Act, veterans service officers are preparing for an influx in applicants dlvr.it/SW4KTg

4th August 2022

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X