The loss of income tax revenue and related issues brought on by the coronavirus may have “an enormous, if not devastating impact on economies of Ohio and specifically, the city of Troy,” that city’s service director, Patrick Titterington, said in a memo.
Meanwhile, two national groups are lobbying for federal aid for local governments, as much as $500 billion nationwide, a figure some Congressional leaders say they can support.
The National League of Cities, and American Federation of State, County and Municipal Employees last week both pushed for a Congressional relief.
The national cities group is calling for $500 billion in direct federal aid and economic relief from the COVID-19 pandemic over the next two years for communities.
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But any Congressional funding package should not impose undue mandates on local governments, but should earmark funding for COVID-19 related issues, said John C. Green, director emeritus Ray C. Bliss Institute of Applied Politics at the University of Akron.
Local governments “are affected as much as small businesses and individuals” by the coronavirus, he said.
Green said local governments are “critical institutions when it comes to dealing with health issues,” but noted later “I think Congress needs to think very carefully on what it wants to achieve by making funds available to local governments.”
First responders at risk
Ohio cities are especially vulnerable to income tax revenue losses caused by COVID-19 business shutdowns because of a heavier reliance on those funds, a Brookings Institution report shows.
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Local city leaders have said early projections range from a 10% to 20% drop in income tax collections. Dayton stands to lose the most locally, as it had budgeted about $131 million in income tax revenue for its 2020 general fund.
The city initially furloughed 479 workers, Mayor Nan Whaley said. But after Ohio Gov. Mike DeWine’s announcement to reopen the state this month, that number dropped to 132, according to Diane Shannon, the city’s director of procurement, management and budget.
The city has implemented a hiring freeze, limited expenditures to only essential services and functions, cancelled $8 million in capital projects and ordered all general fund departments to cut their 2020 budgets by 18%, said City Manager Shelley Dickstein, city manager.
Further reductions - such as pay cuts, mandatory cost-savings days and position eliminations - are likely, Dickstein said.
Without federal rescue funds soon, cities will be forced to cut first responder jobs, Whaley and Kettering Mayor Don Patterson have said.
“And that’s a real danger,” Green said. “Because so much of the (COVID) crisis has been cooperation between the federal state and local government. The federal government doesn’t have a lot of policemen….so the policemen, the first responders, the health officials are basically employed by local governments.
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“So if the federal government were to completely ignore local governments, they could hamper their own efforts to fight the virus,” he added.
Green said there is “a very strong rationale” for federal aid for local governments involving coronavirus issues.
“But local governments, some of the are very well run and fiscally sound. Some of them are not well run and have big deficits,” he said.
“And probably it’s unwise to get into the business of fixing broader fiscal problems with an aid package simply because that just gets complicated fast and the funds may not be focused where the need really is,” Green added.
More cuts expected in June
He said he expects approval of a Congressional relief package to include local government funds this month. In the U.S. House of Representatives, No. 2 Democrat Steny Hoyer said last week that party leadership is hoping for bipartisan backing for the upcoming bill, according to the Associated Press.
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Hoyer said he backs $500 billion in aid to state and local governments with a supplemental aid package for smaller cites left out of previous aid bills, The AP reported.
The office of U.S. Rep. Mike Turner, R-Dayton issued the following statement when contacted about this article:
“I have supported and Congress has approved relief for state, county, and local governments for all coronavirus related expenses. Montgomery County received $92 million directly as a result of the CARES Act. I continue to be in constant contact with our local leaders as this pandemic evolves.”
Meanwhile, Dayton projects a 18% general fund shortfall and proposals for more cuts are being developed by departments heads, Shannon said in an email.
Those recommendations will go to the city commission, “with some possible reductions occurring in June,” she said.
The city announced Thursday two of its three golf courses – Kittyhawk and Madden – would permanently close this year.
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In Kettering, about 240 part-time city employees were laid off April 27, City Manager Mark Schwieterman said.
“City administration is and will be working with city council to propose expenditure reductions to assist in covering the anticipated decline in revenues - specifically the income tax revenue,” he said in an email.
Some cities not talking cuts
Beavercreek has furloughed six part-time and seven full-time workers, and has frozen or is not filling 80 seasonal and intern jobs, City Manager Pete Landrum said.
Although the city has no income tax, it has been affected through other revenue sources, including local government fund, lodging taxes, property taxes and gasoline taxes, among others.
Riverside will make a final decision on initial budget cuts on May 21, said City Manager Mark Carpenter. The city has not furloughed any employees, but is considering plans to lay off workers.
“There are so many unknowns right now,” Carpenter said. “We don’t want to cut so deep that we take the city backwards.”
No jobs have been cut in Fairborn, but the city has a hiring freeze on seasonal workers and positions currently open in the face of a projected $2.8 million shortfall, said City Manager Rob Anderson.
Some road projects also may be in question. “We have started the projects that have already received funding but are unsure about what the state will do with their capital and operations budgets that have yet to be approved,” he said.
Troy has identified more than $2.24 million in budget reductions for this year as Titterington estimated revenue shortfalls could total at least $3.1 million – most of that in income tax receipts - in the city’s general fund.
The reductions take effect immediately.
City officials in Centerville, Miamisburg, Oakwood and Springboro said there’s been no serious discussions yet about possible budget cuts.
Centerville, Miamisburg and Springboro officials said it is too soon to project how the COVID-19 issues will impact their budgets.
Oakwood has sufficient reserve funds for 2020 budgeted expenses, said City Manager Norbert Klopsch.
Wayne Baker, Nancy Bowman, Lawrence Budd and Sarah Franks contributed to this report.
|Community budget cuts || || |
|Beavercreek|| 6 part-time, 7 full-time people furloughed, 80 seasonal and intern positions unfilled or frozen||- Other than the hiring freeze, it is still too early to determine what cuts will be made|
|Centerville||no layoffs||No cuts in budget planned at this time|
|Dayton ||132 employees on temporary emergency leave and/or leave associated with the Families First Coronoavirus Response Act||- The city is developing a 2020 Budget Correction Plan to address the estimated 18% shortfall in General Fund revenue. Specific cuts are currently being developed, however, the City Manager has previously enacted several directives, including suspending $8 mllion in capital projects and equipment|
|Fairborn||no layoffs||"- Fairborn anticipates a reduction in revenues of about $2.8 million. That includes income taxes, property taxes, hotel/motel taxes, local government funds, court fines and fees and other general revenues. The biggest unknown is street projects the city had planned. |
|Huber Heights ||no layoffs||- It is still too early to tell what cuts they will be making, but the city has already cut down on small things or held off on discretionary spending, like not replacing computers or not doing additional building maintenance. The city has chosen to not hire seasonal workers at this time, like concessions workers for the Rose or life guards for the pool. |
|Kettering|| 240 part-time employees laid off on April 27||"- The city anticipates the temporary reduction in staff will save between $40,000 and $50,000 per week in payroll costs. Over 90% of the affected part-time employees work in the Parks, Recreation and Cultural Arts Department. |
|- Kettering anticipates significant reductions in equipment and infrastructure improvements as well as cancellation of some programs and events."|
|Lebanon||seasonal staff furloughed||- Initial budget cuts total approximately $600,000. These cuts include not filling vacant full-time positions, reducing overtime expenses, reducing contractual service expenses and deferring the purchase of a dump truck.|
|Miamisburg ||no layoffs||No cuts in budget planned at this time|
|Riverside ||no layoffs||- The city plans to trim about $800,000 from the budget. Most of those cuts will come from the service department. - The city will save about $250,000 not paving Meadowsweet Street. Riverside will still pave three other streets. |
|Oakwood||no layoffs||No cuts in budget planned at this time|
|Springboro||no layoffs||No cuts in budget planned at this time|
|"||no layoffs||No cuts in budget planned at this time|
|Troy||no layoffs||"- An anticipated vacancy of a service director' office clerk position would not be filled|
|- Two fire department apprentices will be offered voluntary positions this year and paid positions starting in 2021|
|- Cutback in temporary staffing hours for mowing and maintenance in park and cemetery departments|
|- The street/refuse foreman rescinded retirement to save $66,000 in payouts for now|
|- The road repair program reduced $275,000 from $1 million to $725,000|
|'- Replacing a side roof at Hobart Arena delayed until 2021|
|- The street painting program will be deferred until at least 2021 with concerns addressed on case by case basis|
|- Two successful grant applications will allow for taking out $235,000 set aside for signal timing and stoplight projects."|
|West Carrollton ||hiring freeze has been implemented for seasonal workers||-The city has made $797,250 in budget cuts, mostly in delaying capital projects. Cuts were made based on the timing of projects and "low hanging fruit." More cuts will likely come later this year.|