Biden plan delivers big blow to California cities – Pasadena Star News
President Biden and Democrats in Congress delivered for local governments. The $1.9 trillion US bailout package (ARP) allocates $350 billion to states and localities, including $42 billion for California. Republicans have vehemently resisted such funding. House Minority Leader Kevin McCarthy called it a “bailout of the blue state.”
The money comes to counties and cities unconditionally, giving localities broad authority over how to spend it. It makes sense, because the pandemic has had such an uneven impact. Many cities have one-time budget shortfalls directly linked to business closures and drastic declines in travel. Some are waiting for reimbursement from the Federal Emergency Management Agency, knowing that expenses may never be reimbursed due to complicated federal emergency aid rules.
Even before the pandemic, despite low unemployment and a booming stock market, California cities faced widespread fiscal strains. An October 2019 state auditor’s report listed more than half of California’s 482 cities at moderate to high risk of financial trouble. West Covina, for example, was in the top 10 tax risks statewide. A December 2020 state auditor follow-up report found the city, with $227 million in unpaid municipal debt, made “questionable” financial decisions and lacked a fiscal stimulus package, increasing the risk of bankruptcy.
With the new federal infusion, local officials can breathe a sigh of relief — warning of potential drastic cuts to city services. ARP money for local towns is important. Pasadena, for example, should receive $52 million; El Monte nearly $44 million; West Covina $20 million; and Whittier $19 million. Given the scale of the funding, cities will be under enormous pressure to burn the cash – or hide some of it in their reserves. Simply fixing budgets will not fulfill President Biden’s promise to “build back better.”
The first priority should obviously go to those most affected by the pandemic – getting residents and businesses back on their feet. Since this is one-time taxpayers’ money, local authorities have a responsibility to spend it wisely, not pushing money around haphazardly or using the money to support existing inefficiencies.
This requires careful and thoughtful public debate. It’s a great opportunity to rethink local government for the 21st century. Once the money is spent, this opportunity will disappear.
In the 43 years since Proposition 13 was passed in California, cities have had to fend for themselves to make ends meet. Some pursued commercial development, subsidizing malls and car dealerships, while others nickel and dime residents by raising fees and local taxes. Some have built themselves into tourist centres, collecting hotel taxes. Yet all have been burdened by soaring pension costs and outdated service delivery models.
Rather than maintaining the status quo, what if cities invested to operate more effectively and efficiently? Police services consume increasing shares of local budgets. Why not explore new models for routine calls that don’t require an armed response? Our libraries have been closed for a year. Shouldn’t we rethink them in the digital age? How to help children and their families recover from a year of quarantine at home? What about better ways to provide affordable housing and stop the rise of homelessness?
Money alone will not solve these challenges. But if we want to ‘build back better’, we must use the million to find innovative ways to make local governments work better and lower their costs. This year has been painful for everyone. Federal funds are a unique opportunity to invest in a more equitable, sustainable and resilient future.
Rick Cole was mayor of Pasadena and city manager of Azusa, Ventura and Santa Monica. He welcomes comments at [email protected]