In the face of a pandemic and looming recession, here’s how local governments can lessen negative effects
Flickr user Steven Vance
“Stay home, save lives” sign at Julia de Burgos Park
Record numbers of Illinois residents are facing unemployment, and state and local governments are facing growing public service needs and vanishing tax revenues. MPC found that our most vulnerable residents in the region are facing life-and-death choices in managing the effects of COVID-19. Even before the virus started to spread, local governments were preparing for an economic recession. As a result, we are facing an unprecedented strain on public services. State and local leaders are balancing the need to manage public health, immediate relief, and short-term economic stabilization, even as they just begin to think about the longer-term recovery questions. Here’s what local governments should be thinking about as they respond to COVID-19.
Put public health first. Mitigating health risks now not only protects the public but also minimizes local costs to the government. Governor Pritzker’s extended stay at home order for non-essential workers may be tricky as some businesses may seek to be considered essential. Local governments can take a leadership role here in encouraging local businesses to comply with the State order.
From an economic perspective, social distancing results in better future economic recovery. As time passes, the pressure to reopen businesses will mount from relatively unaffected local governments and the public to relax restrictions. Providing up to date health information and a clear rationale for policy choices consistently is the best way to maintain compliance.
Fully funding protective equipment for personnel will minimize the loss of productivity in services and mitigate damage to the community. As public safety concerns arise, we need our first responders and public health officials to guide the public through this crisis. Staying up to date on the cases in Illinois can inform mitigation strategies and needed equipment. Staying connected to the activities and findings of other local governments and organizations such as the Illinois Municipal League also provide needed information and perspective.
Inform citizens of changes. Citizens need to be informed about changes in the process. Once the stimulus package has been implemented in Illinois, individuals receiving unemployment benefits will receive an additional $600 each week above what they would receive in regular unemployment benefits until July 31, 2020. In addition to questions about funding unemployment claims in Illinois, many may need assistance in applying for unemployment or understanding if they are eligible. A large number of claims have strained the State’s capacity and the state is asking to stagger residents applying for unemployment. Local government officials should be up to date on Coronavirus-related policies.
Evaluate operational impacts. Local government boards and councils need a quorum to conduct official business, so Board rules should be reviewed in order to ensure City Council's and Village Boards can continue while adapting to stay-at-home requirements. Communication requirements, public event schedules, sick leave policies, work-from-home protocols, and other operational considerations should be reviewed and modified according to local needs. Purchasing equipment, utilizing technology for remote access to government servers, and flexible work hours may all need to be employed to keep the government running.
Examine fund balance reserve policies and lines of credit. Emergency situations call on governments to use their authority to maintain and sometimes expand spending to provide extra services to mitigate the situation. Cook County recently engaged its line of credit to combat the revenue loss at the County and to maintain service levels in the face of declining revenues. Local governments should reexamine their financial options their authority allows them to provide similar support to its residents. Local governments should remind themselves of the appropriate use of rainy day or contingency funds to manage the crisis.
Flickr user U.S. Army Corps of Engineers Chicago District
Chicago mayor Lori Lightfoot and Governor JB Pritzker during a press conference at McCormick Place April 3 in Chicago to announce that the Alternate Care Facility is ready to receive 500 COVID19 patients in partnership with FEMA and the U.S. Army Corps of Engineers Chicago District
Coordinate with other units of government. Each unit of government has a role to play in combating the effects of the virus. The federal government has increased its response after calls from several governors making their case for intervention. Economic stimulus and state support are two methods the federal government is assisting the states. The CARES Act will provide some federal support for Illinois, and the Congress and the President are working on additional pieces of legislation to assist in mitigating effects from COVID-19. While many of the provision the expansion of an expansion of unemployment benefits is providing economic stabilization. State leadership is necessary to get research and logistical support for medical equipment from the federal government.
State and local governments must also coordinate activities. Governor Pritzker’s stay-at-home order issued on March 20 and extended until April 30 is the state benchmark for local governments. As the virus spreads and more cases are identified, this order could be extended into May or June. With this guidance, each unit of government will have to evaluate its local needs and impacts of policy. Some local governments are already pressuring the state government to allow them to reopen but the Governor is collecting data to see what the best course of action will be.
Forecast revenue changes. Tax revenues will decrease as businesses close due to the virus. As a result, state and local governments need to conduct an analysis to revise their expected revenues. The State of Illinois has revised its projected revenues and lawmakers can use this information during policy formulation and passing a budget. Factors that inform this revenue analysis include the impacts of Governor Pritzker’s stay-at-home order, increased spending in response to public health needs, and spending changes as a result of increased unemployment.
Local governments should conduct a similar analysis of their revenue streams. Property tax bills are due based on pre-COVID property value, but payment rates may decline. Sales taxes and user charges will likely take a significant hit in the short term. Local governments need to adjust their revenue assumptions to match the reality on the ground. Local governments can develop scenarios and strategies to adjust their revenue expectations to inform relief requests, make budget adjustments, and prepare for longer-term budget impacts.
Develop a mitigation plan. Based on observations on the ground, local governments should respond appropriately to combat the destructive forces of the pandemic, using all available local resources and seeking assistance from other units of government as appropriate. Going forward, remember that lessons learned from the last recession apply, but the primary focus should be to address the health crisis. The sooner government activities can shift to address the immediate health needs and safety of the community the better. Maintaining and increasing spending for public health-related activities may be required, even if it strains finances in the short-term.
Addressing challenging public health needs, adjusting government operations, and navigating financial constraints is a stressful process. Evaluating the situation with both optimism and realism can help the local government function at a high level while managing stress. Now is the time for us to reconnect with the community and prioritize the well-being of others, the foundation of public service.