City finances hard-hit by the coronavirusCity finances hard-hit by the coronavirusJulianne Malveaux, Ph.D. / April 16, 2020
Cities depend on density. They depend on people milling around downtown, or at neighborhood parks, or street fairs and restaurants. Not only does this milling about bring energy to urban areas, but it also contributes dollars to city coffers. Now with the coronavirus causing some cities to issue “shelter-at-home” orders, close restaurants except for pickup and delivery, and order the use of facial coverings in public places, the gush of revenue has slowed to a drip, and cities are being forced to revise their budgets to manage the new reality.
San Francisco’s Mayor London Breed was quick to act, issuing a “shelter-in-place” order in late February. In contrast, New York City Mayor Bill de Blasio dragged his feet on issuing a shelter-in-place order. While some cities closed schools in early March, de Blasio dragged his feet until mid-March. As a result, San Francisco is in much better shape, in terms of infections, than New York is. At the same time, both San Francisco and New York are both grappling with the impact of decreased revenue. People won’t necessarily feel it right away and there will be some federal help available, but it will likely take cities years to recover.
The District of Columbia started the year with a projected budget surplus. It had 77 days of reserves on hand, more than they’ve had in years. These reserves were partly due to the steady leadership of Mayor Muriel Bowser and the economic expansion of the past several years. But as soon as the coronavirus lifted its ugly head and Mayor Bowser wisely ordered all non-essential commerce to cease, city finances were at risk. The mayor recently said the city will end this fiscal year $600 million in the hole, which will cause a hiring freeze, a salary freeze, and other austerity measures.
The tourism industry is virtually non-existent these days, and many cities fund some services with taxes on tourists. In San Antonio, about 270 employees will be furloughed because their positions were funded by the Hotel Occupancy Tax. In Detroit, the mayor expects to cut its already “to the bone” budget by $100 million. Baltimore is relocating homeless people to motels to limit their exposure. In the short run, it is heartening that they chose life over budget. In the long term, we must wonder how the budget will handle it.
Chicago was fiscally fragile when Mayor Lori Lightfoot was elected a year ago, and she faced crushing deficits. Now, dealing with the coronavirus, she has had to cancel projected tax increasing, plunging her city even further into the hole. She has imposed a 9 p.m. curfew until April 30 and exploring other ways to promote social distancing in her city.
Cities are Blacker, Browner, older, and younger than the rest of America. These folks, among the neediest, are also the ones at more risk to the coronavirus. It was no surprise to learn that Black folk are more likely to get the coronavirus than others. For example, African Americans are 23 percent of the Chicago population, but a whopping 70 percent of the coronavirus cases. People want to be tested, especially if they are experiencing symptoms, but testing sites are not well geographically distributed. Those areas who can flex political muscles are likely to get more services, while Black and Brown communities are likely to be ignored.
As an aside, it is essential to note that Black folk are among those most likely to risk their lives to ensure that life moves smoothly. We are quick to thank the doctors and nurses, and most deservedly so. Some are now lifting up grocery store workers (who earn an average of $12 an hour), which is important because they keep us fed. But the invisible workers are our sanitation workers, and in some cities, these are mostly Black men. Imagine what might happen if these men disappeared? They are essential to city operations.
Years ago, David Caplovitz wrote a book, The Poor Pay More, that spoke of the “poverty penalty” that comes when the poor pay more for goods and services than their wealthier, Whiter neighbors. Now the coronavirus is extracting a poverty penalty, especially in cities, for those who are most vulnerable. The penalty is the immediate disproportionate impact of coronavirus on Black folk. The penalty will continue to be extracted when, after the coronavirus epidemic subsides, cities will have to adjust their finances. Who will pay? The homeless? Education? Social services? City services? Urban leaders must speak up and talk about the price their cities will pay, and how they might be restored.
Julianne Malveaux is an author, economist and a former president of Bennett College. Her latest project, Malveaux! On UDCTV, is available on youtube.com. Visit: www.juliannemalveaux.com.