As federal lawmakers continue to discuss stimulus packages to help the country cope with the economic fallout from the coronavirus pandemic, Philadelphia Mayor Jim Kenney has urged President Donald Trump to include emergency aid for cities — warning that a failure to do so could force municipal governments to cut vital services and lay off scores of employees.
In a letter sent to the White House on Friday, Kenney said that cities were incurring “extraordinary expenditures” to respond to the health crisis while also experiencing a sharp decline in tax revenues, with most businesses closed and consumers slowing their spending.
The mayor did not offer specifics about the city’s financial situation, but did say that the consequences would be dire if the federal government did not offer financial help.
“Without this assistance, cities like Philadelphia will be forced to take drastic steps to balance their budgets, including massive layoffs and drastic cuts to vital services, which will deprive residents of the services they need, exacerbate the damage being done to local economies, and lessen the possibility of a speedy economic recovery," Kenney wrote.
The letter was another proclamation from the mayor about a potentially crushing economic blow to the city.
Earlier this month, Kenney announced that he was scrapping his $5.2 billion budget proposal due to a severe drop-off in tax revenues. He did not specify what changes would be made to a new spending proposal, saying simply: “It’s not going to be easy, and it’s not going to be pleasant. But at the end of it, we need a balanced budget.”
Kenney also sent a plea for assistance to House Speaker Nancy Pelosi earlier this month, saying that cities had experienced “massive and unprecedented declines in revenue as a result of the economic downturn.”
Mike Dunn, a city spokesperson, said Kenney was unavailable for an interview Sunday. In an email, Dunn said: "We would anticipate that without help from Washington, every city service, including those affecting the city’s most vulnerable residents, would be impacted in some way.”
And though Dunn declined to quantify potential levels of layoffs for city employees, he said that labor costs were the city’s biggest operating expense, and that “it would be difficult to reduce spending without impacting employment levels in some way.”
Earlier this month, the Pennsylvania Intergovernmental Cooperation Authority (PICA) estimated that the city could lose $310 million to $400 million in revenue in the current quarter, which runs from April through June, in addition to losses from March and any months later this year in which a stay-at-home order continues.
The city has about $439 million in its reserve fund, which officials have warned would cover just 30 days of the city’s operating expenses.
And one of the city’s significant revenue sources, the wage tax, is certain to take a hit with businesses closed and some employees eligible to stop paying it if they work from outside the city.
Philadelphia is hardly alone in worrying about its financial health during the pandemic. Last month, Gov. Tom Wolf’s administration laid off about 2,500 part-time and seasonal employees amid a decline in state tax revenues.
Kenney, a Democrat who has frequently criticized Trump, a Republican — even over the coronavirus outbreak — did not reference their differences in asking the president for the government’s assistance.
“The health of our people and our economies are dependent on your actions in the coming days and weeks,” Kenney wrote. “I ask that you act decisively and expeditiously during this unprecedented time for our nation.”