States, cities need fed aid if services are to continue

It is sad, but unsurprising, that providing emergency federal funding to states and cities has been framed in routine, coarse political terms when the need is so obvious and universal.

COVID-19 has devastated state and local budgets as sales and hotel occupancy taxes have fallen sharply. In San Antonio, COVID-19 has blown a $200 million hole in the city’s budget, leading to furloughs and cuts in services.

It would be one thing if this crisis were the product of financial mismanagement. But the city of San Antonio has outstanding bond ratings, and officials have taken political hits through bruising contract negotiations with local public safety unions to control health care costs.

At a time when city services are in peak demand, massive cuts threaten the city’s ability to provide many essential services, let alone assist with an economic recovery. The same holds true for the state of Texas when it comes to education funding, transportation, social services and public safety. The same holds true for cities and states across the country.

Unlike the federal government, which has been running trillion-dollar budget deficits in good times and bad, states and cities have to balance their budgets each year. That means without federal assistance, there will be more cuts to local and state government. If you like police officers responding to calls on paved roads, or you value finding respite in city parks, you should care about this.

Yes, the city has received $270 million from the federal government through the CARES Act, but these funds are limited to costs associated with the pandemic. As Deputy City Manager María Villagómez recently outlined, CARES Act funds can go toward police, fire and Metro Health expenses

These funds can also be used for contact tracing and purchasing protective equipment, rental assistance for those who have lost jobs or income in this crisis, and addressing the digital divide.

This helps, but these funds can’t pave your streets, keep city parks operating, process a permit, inspect a restaurant or cover other city services, such as police and fire response to an accident or a blaze. Likewise, federal funding will be needed to blunt potentially massive state cuts to public education — don’t we all value teachers and schools now? — transportation and child welfare.

This isn’t just about services. Federal aid to states and local government would also be good for the economy. An analysis in 2019 from the U.S. Census Bureau found local and state governments lost 585,000 jobs in the aftermath of the Great Recession. If the federal government is comfortable providing trillions in relief to the private sector to sustain the economy, why would the public sector be any different? And it’s not just public sector jobs. It’s also nonprofits that receive local funding.

And yet we have seen Sen. Majority Leader Mitch McConnell, R-Ky., initially suggest states go bankrupt rather than cover pension obligations. And we have seen President Donald Trump liken this push to blue state bailout, mimicking McConnell’s rhetoric.

“You look at Illinois, you look at New York, look at California, you know, those three, there’s tremendous debt there, and many others,” Trump told the New York Post.

He also said, “Florida is doing phenomenal, Texas is doing phenomenal, the Midwest is, you know, fantastic — very little debt.”

In fact, Texas is not doing phenomenal. State sales tax plunged in April from $2.8 billion to $2.58 billion, according to Comptroller Glenn Hegar, who has said the Texas economy is in a recession. Nearly 2 million Texans have filed for unemployment over the past two months, including about 106,000 Bexar County residents.

And in many instances where are people turning to for rental assistance, help with internet connections and other forms of support? Local government.

U.S. House Democrats have put forward a $3 trillion coronavirus relief package, which includes $29 billion for Texas cities and counties, including $1 billion for San Antonio. A separate pool of funding would send billions to Texas.

We are under no illusion here. It’s a partisan exercise, but it underscores the need for aid to states and local governments. These are major employers whose budgets have been shredded and whose services are needed not just in this crisis but in our recovery.

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