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COVID Relief Bill Leaves Cities and States Hanging

  • Following frantic negotiations, Congressional lawmakers are expected to approve a $900 billion COVID-19 relief bill

  • For individuals, the bill includes $600 checks, a $300/week unemployment extension, rental assistance and a boost to the Supplemental Nutrition Assistance Program.

  • For businesses, the bill includes about $284 billion in Paycheck Protection Program loans; some funds are earmarked for cultural venues and childcare centers

  • The bill also includes $14 billion for mass transit agencies, $82 billion in funding for schools, $68 billion for vaccine distribution, and funds for broadband access and agriculture

  • The bill includes no direct aid to state and local governments, a move that municipal leaders called "beyond disappointing"

Congressional lawmakers are expected to pass a new $900 billion COVID-relief package on Monday, just days shy of the expiration of federal jobless benefits and a federal eviction moratorium.

According to summaries that circulated on Monday, the bill includes a mix of aid to individuals, businesses, schools and transportation agencies, among other benefits, but excludes direct funding for state and local governments as cities, including San Francisco, stare down massive deficits tied to the pandemic.

"It is beyond disappointing that after months of watching our hometowns and our local economies ravaged by COVID-19, congressional leaders have failed to deliver critical support for the first responders, public safety personnel, and municipal officials who have worked tirelessly to keep our communities safe since the beginning of the pandemic," said National League of Cities CEO Clarence E. Anthony on Sunday.

The bill includes assistance for individuals, including a new round of direct stimulus checks worth $600, a $300/week extension to unemployment benefits, rental assistance and a boost to the Supplemental Nutrition Assistance Program (SNAP). It also includes about $284 billion in new Paycheck Protection Program loans, with some funds reserved for hard-hit cultural venues and childcare centers, according to readouts provided to media.

$68 billion will be allocated to the purchase and distribution of COVID-19 vaccines, with some of that funded intended to make the vaccine available at no cost.

Transportation-related agencies and companies will see some relief in the bill, with $14 billion earmarked for mass transit agencies, $16 billion for airlines, $10 billion for highways and $1 billion for Amtrak. The bill also includes $82 billion in funding to help schools and universities reopen, and other funding for broadband access and agriculture.

House Speaker Nancy Pelosi said that Congressional Democrats plan on introducing a new relief bill after President-elect Joe Biden is inaugurated on Jan. 20. But a lack of immediate federal support for cities could make cutbacks at the local government level more likely.

Facing a $650 million budget deficit in the next two fiscal years, in addition to a $116 million shortfall in the current cycle ending in June, San Francisco Mayor London Breed asked City departments to make reductions equivalent to 7.5% of their support from the City's General Fund, along with an additional 2.5% in case the budget outlook worsens.

The deficit over the next two budget cycles is tied to "weakness in key tax and fee revenues driven by a slower economic recovery than was anticipated," according to San Francisco Controller Ben Rosenfield.

San Francisco's business and hotel taxes have been hit particularly hard by COVID-19, which has decimated tourism and led to widespread remote work, which is expected to damage revenues payroll and gross receipts taxes for some time.

In the meantime, the City's core expenses, namely salaries and benefits for roughly 37,000 employees, are due to increase. The first tranche of a pay raise for most City employees, amounting to $250 million in total costs between now and 2022, are scheduled to kick in starting this month. Payroll costs amount to approximately 43% of the City's General Fund spending.

Image by Jake Buonemani
Image by Rasmus Gundorff Sæderup

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