Unprecedented Economic Crisis Demands Unprecedented Response

City officials know the brutal reality of this economic crisis and know that local action alone is inadequate. NLC’s latest survey punctuates with hard data the fact that the fiscal condition of cities is bad and getting worse.

Six months ago 64 percent of city finance officers reported fiscal challenges. Today that number has climbed to 84 percent, compelling local elected officials to make profoundly difficult but essential decisions. They have made budget cuts at the very moment citizens are in need of increased services. Sixty-nine percent of cities have made hiring freezes and/or layoffs; 42 percent have delayed or canceled capital infrastructure projects; and 22 percent made across the board service cuts. Simply put, local elected officials have exercised their authority as they must in this difficult environment.

But we are confronting a new reality that requires a federal response we have not anticipated. As President Obama recently wrote in a Washington Post column, “What Americans expect from Washington is action that matches the urgency they feel in their daily lives — action that’s swift, bold and wise enough for us to climb out of this crisis.”

While there has been passionate debate in Washington over the exact size of the stimulus package and the mix of specific expenditures and tax cuts, there is agreement on the imperative for action at an unprecedented scale. As I write, the Senate and House of Representatives appear to have reached agreement on a final recovery package.

What is significant is that Congress is acting, and that the scope of the bill is commensurate with the scale of the economic crisis. Clearly this is not a perfect bill from anyone’s perspective. For those of us responsible for addressing the needs in our cities, towns and villages, we favored more direct funding of transportation infrastructure projects rather than having funding go through an extra step with the states. We also believe higher levels of Neighborhood Stabilization Program funding and Energy Efficiency and Conservation Block Grant funding would have been significant additions to the recovery effort.

It would be easy to focus on the negative, the glass half empty. I believe that this would be profoundly wrong. Every dollar in the American Recovery and Reinvestment Act is new money the nation wasn’t investing in itself before. This includes significant funding for transportation infrastructure, additional police officers and public safety programs, assistance to families hurt by the recession, local government investment in innovative practices to achieve greater energy efficiency, extending broadband services to underserved communities, school construction and housing and community development. 

Now is the moment for local officials to be proactive in developing an action plan for how best to use the recovery funds. President Obama and the administration staff have been explicit in stating there will be absolute transparency and accountability for programs supported with stimulus funds. They have made clear that program failures of any kind will reflect badly not only on an individual city but on the federal government and all local governments as well. In other words, we are in this together.

In anticipation of these new federal monies, cities need to act immediately by:
•    Contacting state departments of transportation to learn how they plan to allocate transportation funds that must come through the state;

•    Reviewing the regional metropolitan planning organization priorities to define priority projects that will be most effective in creating jobs;

•    Reviewing the permitting process to ensure that projects can move quickly and in accordance with oversight and accountability requirements that are likely to be included in the funding legislation;

•    Streamlining procurement processes, consistent with accountability requirements;

•    Meeting with school superintendents and/or school board presidents to coordinate on how federal education funds can be used most effectively to address local needs and;

•    Developing a plan with regional workforce investment boards for summer youth employment projects and other workforce development initiatives.

We are facing an unprecedented economic crisis. The Congress has responded with an unprecedented economic stimulus package, much of which depends on strong leadership, planning and highly responsible management and oversight of federal dollars by local governments.

Cecilia Muñoz, President Obama’s White House director of intergovernmental relations, urged my colleagues and me to understand that this is a moment when the public will judge if governments — local, state and federal — can be effective. As a passionate advocate for the public sector and local officials, I have no doubt that we can meet and exceed this expectation.