Michigan cities seek emergency federal aid in response to pandemic

Melissa Nann Burke
The Detroit News

Michigan cities and towns are seeking federal relief aid amid the coronavirus pandemic as they struggle to support emergency responders and maintain basic services, all while mitigating an unexpected drop in revenues.

The White House often refers to the government's response to COVID-19 as being "locally executed, federally supported," but most local governments have not received that federal support, said Rochester Hills Mayor Bryan Barnett, who heads the nonpartisan United States Conference of Mayors. 

"It’s essentially a tsunami. Revenues have stopped. Expenses are growing, and supposedly we in local government are supposed to execute the plan," said Barnett, a Republican. "That’s why federal resources are so critical in that execution."

Rochester Hills Mayor Bryan Barnett is president of the United States Conference of Mayors

As the pandemic deepens, communities are seeing huge holes blown in their municipal budgets. Revenue from investments, gas taxes, building permits, facility rentals and other fees evaporated overnight as construction halted, large gatherings were suspended and residents were asked to stay home.

At the same time, communities are facing mounting overtime costs for personnel and first responders such as fire fighters and paramedics, while needing to purchase COVID-19 tests and restock rapidly dwindling supplies of protective health equipment for front-line personnel. 

Nationwide, nearly 90 percent of U.S. mayors who responded to a survey by Barnett's group on coronavirus preparedness last week said they didn't have enough tests kits or protective equipment for their emergency responders and medical workers.

Detroit Mayor Mike Duggan said Tuesday he expects the city will run a $100 million deficit this fiscal year amid the COVID-19 crisis, and "there will be painful cuts."

Detroit — one of the areas hardest hit by the virus — has been losing roughly $600,000 a day in revenue due to the closure of the city's casinos on March 16.

In Rochester Hills, nearly a third of the city's budget was at risk "overnight," Barnett said.

More funding would help the city support financially vulnerable residents, loans for small businesses at risk of permanent closure and community-based organizations providing for basic needs like food and shelter, he said. 

The $2 trillion stimulus relief package that Congress passed last month offered direct relief only to municipalities with populations of 500,000 or more, which in Michigan covers only Detroit and the states' largest counties.

"That was a bit of a surprise. Obviously, that left a lot of communities out," Barnett said.

The cap on direct relief excluded major metropolitan areas, including Atlanta, Cleveland, Kansas City and Minneapolis — "a lot of places where the biggest challenges of this are being felt," Barnett said.  

The U.S. Conference of Mayors proposed using a formula for distributing the money to jurisdictions with populations of 50,000 or more using a mechanism set up through the existing federal Community Development Block Grant Program.

The mayors' request to Congress is among several measures that lawmakers in Washington are weighing for the economic relief package planned for this month. 

House Speaker Nancy Pelosi of California and Senate Minority Leader Chuck Schumer of New York said Wednesday Democrats agreed to provide $150 billion for local governments as part of an interim economic relief package in response to the coronavirus. 

It was not immediately clear whether Republican leaders would support that amount or if the legislation would again only apply to cities and towns of a certain population size. 

Pelosi and Schumer also want more funding for hospitals and food stamp recipients. Treasury Secretary Steven Mnuchin this week called for an additional $250 billion to supplement a $350 billion loan program for small businesses that has seen great demand since opening Friday to applications.

The $150 billion figure for local aid falls short of the $250 billion in stabilization funds for local communities called for in a bill introduced this week by several House freshmen, including Democratic Reps. Andy Levin of Bloomfield Township and Haley Stevens of Rochester Hills.

"Our cities are on the front lines of the fight against COVID-19, and we have an obligation to provide sufficient funding to keep their doors open so they can continue fighting this invisible war," Stevens said in a statement. 

Levin led a letter from over 100 House members last week to Pelosi asking that she lift the 500,000 population cap and for additional funds to be authorized for cities and towns in the next stimulus package.

"We fear that, without targeted stabilization funding, smaller localities will be unable to continue providing ... critical services to our constituents at the rate they are currently," the members wrote. 

The Michigan congressional delegation is asking the Federal Emergency Management Agency to waive cost-sharing requirements required of local communities that receive federal grants to help cover fire fighters' overtime pay and hire extra workers.

In a Wednesday letter led by U.S. Rep. Rashida Tlaib, D-Detroit, and U.S. Senator Gary Peters, D-Bloomfield Township, the lawmakers said the cost-sharing burden is forcing mayors and fire chiefs to make decisions about whether to lay off firefighters. 

“Your waiver of cost-sharing requirements will help ensure that no municipality will have to make the impossible choice of choosing between first responders and other urgent priorities in the midst of a national emergency," the delegation wrote. 

Last week, Gov. Gretchen Whitmer ordered public water suppliers to restore service to disconnected homes at a time when hand-washing is more important than ever to combat the coronavirus.

Some cities, including Rochester Hills, have also stopped charging customers late fees on service payments. 

Tlaib has also urged congressional leadership to include in the next relief package a mandate requiring the Federal Reserve Bank to purchase state and municipal debt to free up cash-strapped cities.

"State governments should not have to simultaneously worry about financial market collateral damage depleting increasingly scarce fiscal resources and tackling this pandemic,” Tlaib and colleagues said last week.