Cities warn of cuts in infrastructure spending as virus depletes budgets

People watch the Manhattan skyline before watching a movie at the Skyline Drive-In NYC movie experience on June 16, 2020 in the Brooklyn district of New York City, in the midst of the new coronavirus pandemic.

Angela Weiss | AFP | fake pictures

More than 700 US cities USA They plan to delay or cancel infrastructure projects after their responses to the coronavirus outbreak left budgets with holes disconnected, according to a survey by the National League of Cities released Tuesday.

The survey, which collected data from more than 1,100 municipalities in the 50 states, found that most cities will delay or cancel the purchase of equipment. Such moves could halt local business activity between companies and increase layoffs and permits already underway in a third of responding cities.

Cities have also been forced to reduce seasonal programming, including youth summer jobs and summer camps, which primarily affect high-risk youth. Almost a quarter of cities have reduced spending for economic and community development programs.

Most cities reported that their highest unexpected cost in recent months included purchasing personal protective equipment and contracting disinfection services to keep public buildings clean as they begin to reopen.

The National League of Cities called on the federal government to provide more funds directly to municipalities, warning that if this were not the case, the Covid-19 nation’s economic recovery could be threatened. Nearly 70% of the cities that responded to the survey said they had not yet received funds from the federal government in previous aid packages.

Cities have already requested $ 500 billion in direct federal aid and economic relief from the coronavirus pandemic, which has left millions of unemployed and businesses in the United States closed for months.

Last week, Federal Reserve Chairman Jerome Powell warned of long-term risks to small businesses at risk due to the slow economic recovery from a recession that started in February.

“The pandemic presents serious risks to small businesses,” Powell said in his semi-annual testimony before Congress. “If a small or medium business becomes insolvent because the economy recovers very slowly, we lose more than just that business. These companies are the heart of our economy and often embody the work of generations.”

Powell agreed that policymakers may have to use additional tools to bring the country out of a depression. The coronavirus has triggered a situation unlike previous recessions in the United States, and the answer may have to be more from Congress than from the Federal Reserve, he said.

In New York, Mayor Bill de Blasio warned in April that the city’s response to the pandemic will cost some $ 7.4 billion in lost tax revenue during the current and next fiscal year. Since then, the city has slowly begun to reopen its phased businesses, allowing for in-store dining and al fresco dining on Monday.

“That is today’s estimate. We do not know what the future holds, but that is what we know now and that is a horrible figure,” de Blasio said at a press conference.