Relief for local governments unclear as virus roils budgets
Monroeville shrank its paving budget by about 40% for 2021, shaving roughly $700,000 from what it usually spends.
Shaler, which saw a $250,000 shortfall this year, put off building a mile-long bike trail and delayed a few hires.
Mt. Lebanon set aside some $400,000, just in case the township’s income dives or costs spike.
None of them is likely to see direct municipal aid from the $900 billion pandemic relief bill that Congress passed this week. Despite pressure from lobbyists, lawmakers didn’t include comprehensive assistance for local governments facing drop-offs in tax revenue and some higher costs.
Leaders in several Allegheny
County communities said they weren’t banking on more federal relief after the CARES Act in March, but advocates cautioned certain services and infrastructure upkeep could depend on new stimulus proposals expected before Congress next year.
Poorer communities with little ability to raise money — and little in reserves — are especially susceptible to the pandemic’s punishing effects, said Rick Schuettler, executive director at the nonprofit Pennsylvania Municipal League. The group has pushed for local government assistance in federal relief plans.
“Folks who were marginal financially to begin with are the ones who are going to be most vulnerable when this happens,” Mr. Schuettler said. The pandemic exacerbates “that
inequality that existed before COVID” among different municipalities, he said.
A major source of local revenue, earned income taxes, took a hit in many communities as unemployment grew, Mr. Schuettler said. Another key source — property taxes — could see delayed effects from the economic downturn as bills come due and people may not have the money to pay them, he said.
Local taxes based on business revenues, along with income from parking and other services, also have slipped as the novel coronavirus has kept more people at home. Meanwhile, some municipal costs are up, including for personal protective gear, more aggressive disinfection practices and — at times — overtime.
Elected leaders often have limited options as they try to accommodate those challenges, Mr. Schuettler said. Public safety in particular, including police and fire protection, tends to be shielded from immediate cuts under collective-bargaining contracts.
But more flexible costs, such as materials for public works or support for parks and recreational programs, can be more likely targets for reductions.
“Communities are going to have to make tough decisions about what they can do and can’t do. I think citizens will see that,” Mr. Schuettler said. “Hopefully, it won’t come to that.”
In Monroeville, which has an annual $35 million budget, leaders expect revenues to drop about $3 million for 2020, municipal manager Tim Little said. A healthy fund balance built over the past half-dozen years can help the municipality weather the decline, he said. To help temper spending, leaders put a capital-improvement program on hold. Monroeville didn’t budget for any federal help this winter because “you can’t count on what you don’t know you’re getting,” Mr. Little said.
Shaler hoped “to get some more federal aid, but we weren’t counting on it,” said township manager Tim Rogers. Workers there “have been very helpful in cutting overtime” as the township has trimmed costs.
Still, “we go into the new year a little concerned,” Mr. Rogers said. The township would probably put stimulus money into paving, storm-sewer rehabilitation, stream-bank restoration and flood control — but he’s not optimistic that support will materialize.
“I think the aid will be aimed at larger cities, where the need is greater,” Mr. Rogers said. Shaler will probably need “to hunker down for a year or two until the economy recovers, when we’ll join that recovery with our residents.”
Pittsburgh officials have warned that paramedics, police and firefighters could see staffing reductions if more federal support for the city doesn’t materialize by summer.
Neither Allegheny County nor Washington County budgeted for extra federal relief, officials said.
But if final language in the latest bill — at more than 5,000 pages long — ultimately allows for reimbursement of county expenses, “it will be very helpful to us,” Washington County Commissioner Diana Irey Vaughan said.
“We know this is something that could be fluid and we’ll have to stay on top of,” she said.
President Donald Trump had not signed the relief legislation late this week. He urged lawmakers to amend the bill with bigger individual payouts — $2,000 instead of $600 — for many Americans.
While President-elect Joe Biden and Democratic congressional leaders called the bill a “down payment” and pressed for more, future measures will depend in part on runoff election results Jan. 5 in Georgia, said Angelina Panettieri, information technology and communications legislative director at the National League of Cities in Washington.
Georgia voters are deciding two U.S. Senate races that will determine whether Democrats or Republicans have control of the chamber. The NLC has advocated for a pot of money that would reach every municipality nationwide, Ms. Panettieri said.
With overall employment rates expected to lag for years, she said, local finances will see “a deep and permanent scar.” She expects lawmakers will make state and local relief a priority in 2021. “Where it gets murky is what the odds of success will be,” Ms. Panettieri said.