Colorado Politics

As US House approves latest COVID-19 relief package, cities and counties are left wanting

While the U.S. House votes on a fourth COVID-19 relief package to the tune of $484 billion

 on Thursday, the measure lacks the aid for cities and counties that are losing revenue and making decisions to lay off or furlough employees.

The Colorado Municipal League, Colorado Counties Inc. the state Department of Local Affairs and the Special District Association conducted a survey, releasing those results Thursday, that said while cities, counties and towns have an average of 6.7 months in operating reserves, they anticipate having to draw them down to cover operating budgets.

The hit to reserves from COVID-19, as estimated by respondents to an April 23, 2020 survey of Colorado cities, counties and special districts.

A total of 551 cities, counties and special districts, out of 4,099, responded to the survey, conducted between April 3 and April 10.

Municipal respondents said they expect to lose 21.26%, or about $520 million, of their general fund revenue. Counties and special districts expect to lose about $160 million for the 2020 budget year.

Declines in revenue among respondents to a survey conducted by municipal, county and special district groups, released April 23, 2020.

That’s due to losses of sales and use tax, which have been drastically reduced by business closures and stay-at-home orders, according to a CML statement. The state Department of Revenue said that 82% of municipalities have sales and use taxes. The municipal respondents also claim they will lose revenue from utility charges and fees, lodging taxes and licenses and permits.

COVID-19 has hit in other areas, as well, according to the survey: more sick and administrative leave, the need for technology for employees to telecommute, overtime, and medical supplies or other pandemic-related expenses. Collectively, the survey said the municipalities will spend nearly $500,000 on COVID-19 response and recovery.

Without aid from Congress, survey respondents said they will delay capital projects and equipment purchases, enact hiring freezes and furloughs – something Boulder has already done and that Denver is contemplating – and plan for layoffs.

Tuesday, the “Big Seven” of governmental associations pleaded with Congress to include aid to cities and towns in Thursday’s relief package, but the Senate approved the bill on a voice vote later that day, and House Democrats were not able to persuade Senate Republicans to include that aid, a request of $150 billion.

That’s on top of an earlier $150 billion appropriation made in the CARES Act; Colorado’s total share is $2.233 billion, according to the Congressional Research Service, to be split roughly 55/45 between the state and local governments.

Notably, Senate Majority Leader Mitch McConnell of Kentucky said Wednesday that if states are struggling, they should declare bankruptcy. According to the Louisville Courier-Journal, in an interview Wednesday with conservative radio host Hugh Hewitt, McConnell said he’d be “in favor of allowing states to use the bankruptcy route,” McConnell said. “It saves some cities. And there’s no good reason for it not to be available.”

However, McConnell told NBC News Wednesday he’d be open to a package with aid to cities and counties. “I think the next debate, which I assume will relate to state and local government relief, needs to be when the Senate is back in session with full participation,” McConnell said, in response to questions from reporters. “And in the meantime, also take a look at how much debt we’ve racked up and not try to wave something through the Senate, of that consequence, without full participation.”

While that aid didn’t make its way into the bill being voted on Thursday, another relief package is already in the works and Congressional Democrats are expected to champion relief for city and county governments in that bill. However, that aid package will not start moving through Congress until next month; technically, Congress is on recess until May 4 and came back into session to vote on the $484 billion package.

During debate on H.R. 266 Thursday, Rep. Maxine Waters, a California Democrat, revealed her sister is dying from COVID-19 in a St. Louis hospital.

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