Speaking to hundreds of local officials Friday morning, League staff detailed the financial fallout of the pandemic, listed immediate responses and actions that municipalities should take, and detailed the League’s present advocacy efforts as it relates to federal and state COVID-19 policy.
At the federal level, the CARES Act, a $2.2 trillion relief package signed into law last week, will appropriate $4 billion to North Carolina through the Coronavirus Relief Fund, with direct appropriations to local governments with populations greater than 500,000. NCLM Executive Director Paul Meyer noted that these funds, however, can only be allocated to expenditures related to COVID-19, and cannot be used to offset lost revenues. Further guidance from the U.S. Treasury is not yet available, but this limitation is clear.
The League’s chief advocacy goal is to get those replacement funds through additional legislation, Meyer explained. NCLM staff is in close communication with federal contacts and with advocacy partners at the National League of Cities. All updates regarding these efforts, as well as further clarification on the already-passed CARES Act, will be promptly communicated to members and listed on the League’s coronavirus webpage.
Regarding local finances, NCLM Director of Research and Strategic Initiatives Chris Nida walked through the League's annual Revenue Projects Memo, which was published last week. Unlike previous iterations of the report that provided a focused projection, Nida noted that this year’s memo projected a range of estimates, taking into account both the available information and the unprecedented economic uncertainty. Economic data from March will not be available until June. Thus, the League will be providing frequent updates to the memo as data becomes available.
From the report:
The events of the past weeks have changed circumstances dramatically and in ways that the available data does not yet reflect. We have surveyed the available information and done our best to synthesize that in a way that we think reflects the current reality for North Carolina’s municipalities, but if there is one common thread that runs among recent analyses, it is that this period of economic activity is unlike any seen in recent decades.
What is unfortunately clear, Nida explained, is that cities and towns are facing substantial declines in revenue, due primarily to the drop in sales tax revenue, occupancy tax revenue, and utilities payments. Nida, responding to questions, confirmed that despite the lack of necessary data, the statutory deadlines for passing a budget have not been addressed by the N.C. legislature, and thus balanced budgets must still be ratified by July 1.
Additionally, NCLM Human Resources Consultant Heather James highlighted the Families First Coronavirus Response Act, which was signed into law on March 18, and specifically the Paid Family and Medical Leave and Paid Sick Leave within that act, which must be implemented by all municipalities on April 1. To further address questions surrounding the complexities within that legislation, NCLM will be conducting a free webinar for all members on Thursday, April 10. Further details can be found here.
