Small US towns are neglected from coronavirus relief and it’s a ‘slap in the face’: Georgia mayor

Just as the $349 billion set aside to help small businesses hurt by the coronavirus shutdown exhausted its funds Thursday, more questions were being raised about how the federal government intends to extend more aid to prevent more jobs from being lost.

Among those most concerned are leaders in small towns across the country staring down massive budget shortfalls due to a drop in tax revenues as unemployment rises and sales of just about anything beyond food fall off a cliff.

According to a recent survey from the United States Conference of Mayors and the National League of Cities, nearly 90% of leaders in cities and towns in the U.S. signaled they expect a revenue shortfall. But with much of the $150 billion in the federal stimulus bill solely set aside for municipalities with more than 500,000 inhabitants and specifically earmarked for efforts tied only to mitigating the spread of coronavirus, small town leaders say they are being hung out to dry.

“They are leaving us out of the equation when it comes to being able to administer ourselves the needs and the finances that it takes to operate our cities,” said Union City, Georgia Mayor and NLC Second Vice President Vince Williams in a Yahoo Finance interview. “It’s almost a slap in the face.

‘Not just a big city problem’

President Trump has voiced he could be open to increasing the aid to states and municipalities in another round of stimulus, but gridlock in Washington has so far blocked attempts to even replenish the politically popular relief fund for small businesses. The larger the divide between Republicans and Democrats grows, the less hope for leaders like Williams have that relief is coming. Unlike larger cities, smaller towns have fewer options to balance budgets beyond immediate job cuts or eliminating public services. And unlike the federal government, they can’t just print money to fix the problem.

FILe – In this April 2, 2020, file photo, President Donald Trump and Jovita Carranza, administrator of the Small Business Administration, listen as Treasury Secretary Steven Mnuchin speaks about the coronavirus in the James Brady Press Briefing Room of the White House in Washington. Hundreds of cities and counties grappling with the economic fallout caused by the pandemic might receive little, if any, of the emergency funding allotted for state and local governments in the $2.2 trillion coronavirus stimulus package. (AP Photo/Alex Brandon, File)

“As commerce has come to a grinding halt, 61% of local leaders are reporting an immediate impact of lost sales tax revenues in addition to significant reductions to other tax and fee revenues that we depend on to keep our cities operating,” Williams explained. “We’re asking that our federal leaders stop the political posturing.”

As he points out, only 38 cities have populations above the 500,000 threshold that would allow them to receive a piece of the $150 billion in federal aid. Without knowing how long the shutdown is expected to last, smaller towns could be particularly vulnerable to prolonged budget shortfalls.

“This is not just a big city problem,” he said. “This is an every city problem and something must be done.”

Zack Guzman is the host of YFi PM as well as a senior writer and on-air reporter covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.

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