U.S. Cities Projected to Lose $360 Billion in Revenue From Pandemic

U.S. Cities Projected to Lose $360 Billion in Revenue From Pandemic

iStockphoto/The Fiscal Times

The coronavirus pandemic is projected to cost U.S. cities up to $134 billion in lost revenues this year and more than $360 billion through 2022, with the shortfalls varying significantly by state and the makeup of local revenue streams, according to a new analysis by the National League of Cities, an advocacy group.

The analysis was based on calculations of how expected joblessness in each state will affect collective revenue for cities, towns and villages in the state, based on a projection that every 1 percentage point increase in unemployment results in a 3% drop in tax revenues. The analysis also factored in assessments of state revenue streams, with those more dependent on sales or income taxes hit harder than those that rely on property taxes.

The report projects that Pennsylvania’s cities, towns and villages will be hit hardest, with 2020 revenue losses of 40%. Municipalities in Kentucky, Hawaii, Michigan and Nevada are also projected to lose more than a third of their collective revenue. Connecticut is projected to suffer the smallest decline, at 9.3%.

“If America’s cities are not provided the funds from the federal government, we won’t be a part of the economic solution,” Clarence Anthony, the league’s chief executive officer, told Bloomberg News. “This survey, and the findings, puts a face on the impact of the pandemic and the need for city leaders to get direct funding to respond quicker than at the state level, where most of the funding has gone in the past.”