By Fullerton Mayor Jennifer Fitzgerald and Costa Mesa Mayor Katrina Foley
Millions of people depend on their own towns and cities in California for essential human services. The COVID-19 crisis is crushing already cash-strapped California cities. Those towns and cities are beyond frustrated that we’re being ignored by our counties, state and federal government when it comes to financial assistance. That’s why California mayors are asking our government at all levels to come together to bring all California cities immediate and significant relief. We’ve proposed common sense solutions that will allow California cities to continue to thrive despite the current challenges.
Sales tax and TOT tax losses have been devastating. Combined with city COVID related expenses, the culture of our cities hang in the balance as our local small businesses and city governments cling to life during this time.
The City of Costa Mesa has laid off 54 employees and reduced the hours of another 72. Costa Mesa will lose up to $18 million. South Coast Plaza, which generates one-third of the city’s annual budget has been shuttered for the last month. All city events have been cancelled and the OC Fair will likely be cancelled, as well. The City of Fullerton laid off over 150 employees and expects to lose $3 million before June 30th. Fullerton’s mom-and-pop retail base has been decimated and many shops will likely never reopen. At the same time, all of us are having to spend millions on COVID-related expenses. That means that all city essential services are now on table for drastic cuts. We immediately face gut wrenching decisions like calling off city events, closing our museums and libraries, shuttering our parks, more layoffs and cuts to public safety.
Mayors across California, including a majority of Orange County Mayors, have come together in the California Mayors Coalition (Californiamayorscoalition.org) to urge the Governor to take the following actions to save California cities:
The Governor should require free, widely available testing across California’s 58 counties. Each county has their own system right now and most of them are inadequate. The Governor has made testing one of his criteria to opening back up our economy and California mayors stand alongside him: we have to get our residents back to work and our kids back to school. Cities can’t survive otherwise.
The Governor should freeze the current CALPERS rate its members, like cities, pay into the system for the next two years. If CALPERS requires its members to contribute more in light of the current instability of the stock market, many cities will have reduce their level of service across the board to devastating effect. This “break” for CALPERS members will provide the time needed for its members to regain their footing and remain healthy into the future. Also, during this time, current public employee retirees should not receive an annual cost of living increase. As so many current employees are being laid off and masses of Californians are on unemployment, public retirees shouldn’t get an annual raise.
The Governor needs to distribute a portion of the federal COVID response emergency funding to cities who have a population of under 500,000. Out of 481 cities in California only 3 received get direct funding from the current federal emergency relief legislation. Millions of Californians got nothing. Cities up and down this state have declared local states of the emergency and have had to expend millions in COVID response dollars housing the homeless, purchasing remote work technology and supplies, expanding and enhancing disinfecting and cleaning practices across the board. The State and California counties should distribute a portion of the funding they received to all California cities.
Currently, there is a debate in Congress about another federal funding bill which would include funding for cities. Congress and the President must put politics aside and help this nation’s cities. We urge California Representatives and U.S. Senators to advocate for legislation that ensures these federal funds can be used by cities to replace lost revenues, such as sales tax and transit occupancy tax. The federal government is supplementing small business revenue and making direct payments to taxpayers; cities need that same help.
The State government should advance sales tax funding that would have been collected by local governments over the next twelve months to protect cities from insolvency because of lack of sales tax; one of the two main sources of city revenue. The Governor is allowing small businesses in California to defer sending in their sales tax for one year. Small businesses definitely need relief, but that directly hits the main source of funding for city services. The Governor should advance California cities their anticipated sales tax share for the time of that deferral funded from the state’s rainy-day fund. This action is small by the state’s standard, but would hugely help cities throughout our state weather this storm.
Workforce development programs and increased economic development funding must be a priority to put Californians back to work. One in seven California workers are without a job. Jobs and a trained workforce are critical to our local and state economy. The state should immediately create financial resources for local economic development and job training programs. Now is the time for Sacramento to invest in the local community so that the thousands of out-of-work CA residents can access local programs, tailored to local needs; that’s how they’ll be able to feed their families moving forward.
Now is the time to come together to ensure the survival of local, essential human services in California. Cities provide those services and our state and federal leaders must join our fight to make sure that can continue.