Survey Shows Most Cities Expect Revenue Loss, Service Cuts

The COVID-19 pandemic has brought on an economic deep freeze, and as a result, most cities in the U.S. are anticipating revenue shortfalls this year, according to new survey data — especially the larger cities.

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New York City expects to lose $7.4 billion in tax revenue across two fiscal years. Los Angeles thinks it will lose anywhere from $425 million to $829 million in the same period.

As time goes by, it’s becoming more and more clear that the COVID-19 pandemic’s economic damage will hurt state and local governments’ finances, which will likely lead to changes in the way they use technology as well.

Not only are cities, counties and states starting to release budget revisions, but new evidence shows that most expect to have to cut public services and some think they’ll need to furlough or lay off employees as well. A survey of municipalities across the country from the National League of Cities and U.S. Conference of Mayors conducted in the first seven days of April found that the vast majority expect a revenue shortfall.

One clear trend in the survey is that larger cities are anticipating worse impacts than smaller ones.

Permitting fees are the area cities appear to be most concerned about, with service and utility fees as well as sales taxes following behind closely. Fewer city officials are worried about income and property taxes.

As a result, most cities expect that they’ll have to make cuts to government services in some form. In addition, most of those with populations higher than 50,000 are anticipating employee furloughs. Fewer — ranging from 26% of the smallest cities to 47% of the largest — think they will have to lay off staff.

NLC and USCM used the data to argue that the federal government should distribute relief money more broadly among local governments. The CARES Act, passed at the end of March, only gave funds to local governments with more than 500,000 residents.

The survey, conducted from April 1 through 7, took responses from officials in 2,463 cities, towns and villages. Of those, 2,191 have a population lower than 50,000; 181 are between 50,000 and 199,999; 56 are between 200,000 and 499,999 and 35 have a population greater than 500,000. The total population of all participants is about 93 million.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.
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