TIFTON — Tifton Mayor Julie Smith was one of four Georgia mayors participating in a conference call to include cities and municipalities in the federal CARES Act.
On Monday, July 27, the Georgia Municipal Association hosted a press conference with the mayors of College Park, LaGrange, Tifton and Union City. The mayors discussed the economic effects of the COVID-19 crisis on their respective cities and what actions they would like to see at the federal level to ensure cities, towns and villages in Georgia remain essential to the national economic recovery.
The CARES Act currently under consideration in the U.S. Senate does not contain direct aid to local governments to help with COVID-19-related problems.
Larry Hanson, GMA executive director, said city governments must be included in any financial aid package.
“We have made it clear that there will be no national economic recovery without a clear commitment from the federal government to address the staggering revenue shortfalls and skyrocketing costs that local governments like ours have faced due to the negative and ongoing impact of COVID-19 on our current economies and our cities,” he said. “It is past time for Congress to step up and provide direct aid to municipalities. Without direct aid to cities in the next federal aid package, there will be dire long-term consequences for our communities and our citizens, and our efforts to revitalize our national connection will be negatively impacted.”
Hanson said cities are still responsible for public safety and basic quality of life for their residents, adding revenue losses have impacted these services in most cities.
“Cities in Georgia are our economic centers and they are home to approximately 70% of the jobs in the state,” he said. “They account for over 90% of the state's GDP. Approximately 20% of Georgia's workforce is comprised of public employees, and as they lose jobs and face furloughs the state's economy is impacted and recovery further slowed. If the federal government fails to support cities, they will succeed in setting back the nation's economic recovery by years.”
Hanson said tax revenues are down because of COVID-19-related shutdowns and slowdowns, and due to many residents being out of work, utility payments have not been paid at the level needed to offset the cost of providing the services.
“Cities cannot forego this revenue forever as the revenue from water and sewer sanitation electric and gas customers is what pays the expenses to operate the services,” he said. “Every city will have major revenue losses that will affect their ability to fund essential services like public safety, sanitation, public works, water, electric and gas. These services are critical to maintaining the quality of life our residents expect and deserve. Without federal assistance we face the real possibility of many cities struggling for years to recover.”
The four cities that were highlighted in the conference are different.
– LaGrange is an industrial and manufacturing city of approximately 30,000 in west central Georgia.
– Tifton, in South Georgia with a population of approximately 16,000, is heavily agricultural.
– College Park, which is home to approximately 15,000 in north Georgia, relies on the tourism and hospitality industries.
– Union City, with a population of approximately 21,000, is located in Fulton County, near Atlanta and is the headquarters for several national businesses.
Despite the differences in size, location and economic strengths, all four cities have had the same issues as a result of COVID-19: slashed revenue, leading to paused or cancelled projects and a struggle to provide the same services with less money and fewer resources.
The argue CARES Act funding would make up for decreased revenue, which in turn would keep city budgets afloat until the end of the pandemic.
Tifton Mayor Julie Smith said the town depends heavily on the agricultural industry and the hotel motel tax for revenue.
“There are several ways that this horrible event has impacted our community,” she said. “From that rural economy standpoint our small businesses have really been hit severely. If major industry is the backbone of the community, certainly small independent business is the heart.”
Smith said in addition to small business hurting, the agricultural community, from large-scale operators down the line to the seasonal migrant workers, has taken a hit.
She also mentioned logistical issues with providing hurricane shelters when social distancing must be maintained but people also need a safe place to wait out storms. Tifton and South Georgia have had major impacts from hurricanes and tornadoes several times in the past few years.
“It's really been a challenge to balance the needs of our citizens, the needs of our industry, the needs of our independent business and to also keep that budget balanced and make sure that our community is as safe as possible,” she said.
Smith said recent economic development initiatives targeted at rural parts of the state had just started having an impact when the pandemic hit and halted them, particularly efforts to expand broadband internet access to more people.
Tifton also had an economic hit when two college campuses moved instruction online taking thousands of students out of the community. Several members of the city’s public safety contingent tested positive for COVID-19 and weren’t able to work, reducing the number of personnel responding to emergencies and leading to overtime for those who had to fill the gaps.
“This is not a bailout,” she said. “It's not just a handout. It's not that we've misappropriated any of our funds or we've spent your money frivolously and now we just need the federal government to come in and make us flush again. We watch every nickel and dime that comes into our community because it's not our money, it's our citizens' money and so we have to be good stewards of that money.
"The state not only requires it but from an ethical standpoint that's our role in government, to make sure that that tax dollar is managed to the best of our human ability and so when you have these large chunks of cash that have been removed from your budget through no fault of the city, through no fault of the citizens that pay for those fees, it really creates distress on the system," Smith added. "So I'm anxious to see what's going to be happening in the next coming weeks with this CARES Act.”
Union City Mayor Vince Williams, who serves as GMA president, said he is concerned about the “intentional attempt to leave cities out” of receiving federal funding.
“When we leave small town America out of the equation that does not give us a fair opportunity to participate in the recovery of this economy,” he said. “Cities are struggling at this very moment to pay for critical services despite having sound financial practices in place leading up to this crisis. Municipal leaders have raised the alarm that revenues used to pay for essential services … such as police, fire, public services, utilities, are in critical positions right now.”
He said some cities across the state are considering furloughs or layoffs, which will make it more difficult to maintain expected service levels. Capital projects have been paused, streamlined or cancelled.
“We have relationships with many of our community members,” Williams said. “They expect a level of service even in a pandemic, so we've got to continue to do what we need to do to make sure that these everyday expected quality of life issues are addressed.”
He said cities have been a part of the response to this virus and cities need help to be a part of the recovery.
“We must remember this is not just a big city issue,” he said. “This is an every city issue and that has got to be the message as we continue to push forward.”
College Park Mayor Bianca Motley Broom said her city, which depends heavily on tourism and hospitality, has seen revenues decline due to those sectors of the economy taking a hit.
“We are dealing with the throes of a global pandemic and local government is often the first place where people will go to seek assistance,” she said. “I and the other mayors on this call ,and all of our colleagues in elected office, came here to get things done for our communities. It is so incredibly painful for me and I know others to be able to say we can't do anything at this point. We don't have the support, we don't have the assistance to be able to help you, our citizens. It's just completely contrary to the reason that all of us got into this in the first place.”
Motley Broom said hotel-motel tax makes up almost 25% of College Park’s revenue sources as a city.
“In April of this year, we took in about $122,000 in hotel tax revenue as a city,” she said. “Compare that to April of 2019 and 2018 when we took in a little bit over a million dollars. So it's been an absolutely devastating hit to our revenue source and it has meant that we are trying to balance not only the health and safety of our employees but also making sure that we are still delivering services with less funds coming in.”
She said several major projects have been paused, which means local contractors aren’t able to work.
“It has a ripple effect throughout the community,” she said.
LaGrange Mayor Jim Thornton said his city has historically been a multi-county regional industrial center, manufacturing center and transportation hub.
“LaGrange is a full-service utility city,” he said. “We supply electricity, gas, water, sewer, sanitation and telecom services to our businesses and to our residents.”
Thornton said the pandemic particularly affected utility revenue and the revenue generated from the hotel motel tax.
“When business and industries are shuttered or operating at reduced capacity our utility sales declines significantly,” he said. “However, our fixed costs for delivering those services and our costs for maintaining that infrastructure remain the same.”
He said the decline in revenue makes it very difficult to maintain high-level services and invest in infrastructure growth.
“Without those investments, our ability to support our existing businesses and manufacturers as they expand, and to recruit additional industrial development, is negatively impacted.”
He said LaGrange has seen a loss of $400,000 in revenue since April as a result of COVID-19.
“Let's assume this continues, God forbid, for the rest of the year,” he said. “You're talking about well over a million dollars of money removed that we cannot use to make those investments in our people and in our distribution system. Over time that's going to make it very difficult for us to not only serve our current customers but more difficult to expand our system as we take on additional load and as we grow and expand our manufacturing base through economic development.”
Thornton said the city has also seen a decline in hotel motel tax revenues of 85% since the same time last year.
“We've seen other revenue impacts but the utility sales and the hotel motel tax declines have been very distressing and as COVID lingers on, those issues are just going to be more significant,” he said.