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League Bulletin

June 12, 2020

​​WHAT HAPPENED: The League’s crucial conversation on local government revenue losses due to COVID-19 received statewide and national attention as lawmakers continued shaping broad relief measures.

WHAT IT MEANS: The repetition of these facts – for one that trouble in local coffers ripples into the greater economy -- is increasingly vital as time passes. Let’s the keep the iron hot with our communication. Below, you’ll find context and links to point out when you have this conversation with state and federal legislators urging their support for a relief package. 

ON TAP: The pace has accelerated at the General Assembly, with bills moving through the chambers – some of them highlighted in this Bulletin – and more “mini budget” bills placed on the governor’s desk for signing.

THE SKINNY: There are plenty of legislative topics to focus on, and this Bulletin breaks out the latest of interest to cities and towns. Read on for looks at a program to help with water and wastewater utility viability, package delivery robots, bar and gym reopening proposals and, of course, the critical revenue conversation.

​Statewide and national attention landed this week on the League’s call for Congress to help local governments so financially hard-hit by COVID-19, for one with a Raleigh News & Observer opinion piece quoting League Executive Director Paul Meyer to help explain the predicament. “The economic downturn created by the coronavirus pandemic is hitting cities all across North Carolina straight between the eyes,” the newspaper quoted of Meyer, sourced from a League call-to-action video. “We haven’t seen an economic downturn like this in decades upon decades.” The first wave of federal aid in the CARES Act hasn’t made it to cities and towns. “What’s needed is a second wave of federal aid, this time sent directly to local governments regardless of their size,” the N&O writes. “It’s not simply a matter of protecting full municipal services. It’s also important for the recovery of the economy. Government spending in a recession sustains and creates jobs.” The piece adds from League President and Cary Council Member Jennifer Robinson: “For cities and towns to continue to be catalysts for economic growth, revenue shortfalls created by this pandemic must be addressed. We need assistance from Congress and from state legislators."

The League’s message also hit a page in the Greenville Daily Reflector with an op-ed from League Board Member, N.C. Mayors Association leader and Bethel Mayor Gloristine Brown. “As retail activity has fallen, so have sales taxes that cities and towns depend on to fund crucial services like police and fire protection, street maintenance and sanitation. Water and sewer systems are seeing much higher rates of non-payment as residents who have been laid off or furloughed struggle to pay bills. With hotels experiencing 70 and 80 vacancy rates, occupancy taxes used to promote tourism have seen dramatic declines,” Mayor Brown wrote, adding she’s already heard from other mayors about possible service cuts and building project delays. Hits like these to municipal government – created by the pandemic, not government’s own doing – spell trouble for the economy. “Study after study looking at the aftermath of the 2008 Great Recession showed how struggling state and local governments, required to balance their budgets, slowed a national recovery because of their cuts,” Mayor Brown pointed out. The National League of Cities shared the op-ed at the national level in social media posts.

The League’s awareness and education campaign continues as the need not only remains but grows. The N&O points out that there is potential in Congress with the House’s passage of the HEROES Act, which includes close to $1 trillion for state and local governments and a bipartisan bill in the Senate, the SMART Act, with $500 billion. But their passage in the Senate isn’t at all assured, as leader Mitch McConnell has suggested other routes and timelines.

It’s important to keep the iron hot. Contact your members of Congress now and urge their support of relief for cities and towns, the lifeblood of the economy. For more information, see this fact sheet and a letter issued jointly by the League, the N.C. Association of County Commissioners and the N.C. Metropolitan Mayors Coalition.

​More than 700 registrants are on file for CityVision 2020 – straight ahead, June 16-18 -- this year a virtual conference with important, timely programming to help cities and towns. If you’ve been on the fence about past CityVision conferences, this FREE opportunity awaits you.  

We have convened a three-day lineup of live sessions featuring state government officials, industry leaders and on-demand sessions to help municipalities move forward. The conference agenda includes engaging and relevant sessions from:

  • Josh Stein, N.C. Attorney General, N.C. Department of Justice
  • Mike Sprayberry, Director, N.C. Emergency Management
  • Tracy Doaks, Director, N.C. Department of Information Technology
  • Michael Walden, Professor and Economist, NCSU
  • James H. Johnson Jr., UNC Kenan Flagler Business School
  • Pete Seeber, Chief Strategy and Risk Officer, CORVID Cyberdefense
  • Donald Gintzig, President and CEO, WakeMed Health & Hospitals
  • And more!
Register here.

​A bill that would provide $9 million in non-recurring state funds, creating a new grant program called the Viable Utility Reserve, passed the state House this week and awaits Senate action. The program in HB 1087 would support financially distressed public water and wastewater systems by facilitating viable operations and encouraging regionalization. League Board President Jennifer Robinson previously had issued letters to each chamber of the General Assembly appreciating their support and attention to the issue. She noted that declining populations in many rural municipalities and loss of manufacturing operations have dealt huge blows to utility systems now in need of aid.

In other bill news, the Senate advanced a proposal on package delivery robots, with the latest version including language that would not preempt local government regulation. Addressing advances in technology, SB 739 Personal Delivery Device/PDD/Delivery Robots concerns “package delivery devices” that would operate autonomously on sidewalks and streets. Thanks to Sen. Jim Perry for working with the feedback of local government officials in the development of this proposal, which is currently in the Senate Finance Committee.

​The reopening of bars and gyms remains in controversy as COVID-19 impact numbers continue worrying health officials. This week, the General Assembly passed a second effort to allow such establishments to open at limited occupancy, but as of this writing it hadn’t received Gov. Roy Cooper’s signature. Last Friday, the governor vetoed a similar bill to reopen bars and increase the number of heads allowed inside restaurants, which currently are operating at reduced capacity. Governor Cooper argued in his veto message that the bill would “limit the ability of leaders to respond quickly to COVID-19 and hamper the health and safety of every North Carolinian.” The latest bill, HB 594 Temp Open Gyms/Health Clubs/Fitness Centers, includes language enabling the governor to close bars, gyms and so on if virus numbers jump, but only with majority approval by the Council of State. The bills moved along party lines.

​The League has updated our Interactive Quarterly Revenue Report with April Collections/June Distribution sales tax data released Tuesday (tip: click the arrow in the bottom right corner to make it full-screen). Later this month, we will post a more comprehensive report and economic update once utility tax data becomes available. All state-shared revenue materials are housed on this page of our website. This sales tax data based primarily on sales from the month of March showed sales tax revenues distributed to local governments were nearly $23 million below 2019 levels for the same month. Losses varied geographically across the state, and additional county- and municipal-level detail is available in the links above. The next month of sales tax data will be available in July and reflect April sales, which national data suggests will be the most heavily impacted by the Covid-19 pandemic. League analysis of that data will be posted shortly after it is made available. If you have any questions regarding sales taxes or other local revenues, please contact League Director of Research & Strategic Initiatives Chris Nida.