Cities Plan to Slash Spending as Coronavirus Devastates Local Budgets

Cities Plan to Slash Spending as Coronavirus Devastates Local Budgets

Flickr/Charles Knowles

Hundreds of cities, towns and villages in the U.S. plan to reduce spending significantly as they respond to budget shortfalls resulting from the coronavirus crisis, and many are already cutting back, according to a new report from the National League of Cities.

In a survey of 1,100 municipalities, the group found that more than 700 plan to delay or cancel road repair projects, critical infrastructure upgrades, and the purchase of new equipment. About 800 cities said they are cutting spending on services, including police, fire, sanitation and recreation. And about a third said they expect to furlough or lay off workers.

 The NLC estimates that local budgets will see a shortfall of $134 billion in 2020, and

 $360 billion between 2020 and 2022. The reduced spending will have a powerful negative effect on small businesses and the quality of life, NLC said, especially in smaller municipalities.

A call for additional federal assistance: The CARES Act in March created a $150 billion fund intended to assist states, territories, tribal areas and local governments. But many smaller cities were excluded from benefiting directly from the fund and so far only 36 municipalities, all with populations over 500,000, have received aid, worth a total of $7.9 billion. The NLC called for new legislation that would allow smaller cities to receive aid directly, and for the Treasury to start specifically targeting smaller municipalities. “Without direct appropriations to cities, we fear that funds for these municipalities will never reach their intended targets,” the group said.