Recent legislation extending the Paycheck Protection Program, which provides forgivable loans from the Small Business Administration to small businesses and self-employed individuals, won’t do enough to protect municipalities and front-line workers, Ithaca’s mayor said in a tweet on Tuesday.
Svante Myrick ’09 criticized Congressional Republicans and Rep. Tom Reed (R-N.Y.), who he says are bailing out airlines while failing to aid cities and local governments.
“This bill is a tragedy for American municipalities and I am so disappointed that my Congressman Tom Reed did not fight for us,” Myrick tweeted. “This will force incredibly deep cuts to services and layoffs.”
Myrick said that city officials will deliberate over decisions to lay off and furlough employees in the coming week, but that the number of employees sent home will likely be at least 100.
“I’m furious, and I’m concerned,” Myrick said, adding that many city employees have spent decades in public service.
The most recent agreement in Washington includes more than $320 billion in additional funding for the PPP, which is part of the Coronavirus Aid, Relief, and Economic Security Act, a $2.2 trillion federal aid package.
“They have left out police and firefighters and planners. They left out the people who build our roads and bridges,” Myrick told The Sun. “Just as Delta Airlines was affected, so are municipalities. With no police officers or firefighters or streets, there is no way to open up the country.”
Reed, who signed a bipartisan letter from the New York and New Jersey Congressional delegation calling for direct assistance to help fight the COVID-19 outbreak, reiterated in a press release on Sunday that he supports more funding for state and local governments. But he said securing more aid as part of the newest PPP measures would be impossible, since Congress is not meeting in person and leadership won’t allow members to participate virtually.
“Passing the Paycheck Protection bill requires complete agreement among every Senator and House member, which makes including state and local aid in the replenishment bill impossible,” Reed said. “However, the success gained in Speaker [Nancy] Pelosi [D-Calif.] and Minority Leader [Chuck] Schumer [D-N.Y.] agreeing on a revised formula for the distribution of state and local direct aid will help us protect local governments in the upcoming phase four negotiations.”
The Senate’s approval of additional funding came after initial funding for small business loans quickly ran out, The New York Times reported. Democrats initially rejected the Trump administration’s suggestion that Congress only pass funding for the PPP, instead proposing a broader package that also provided funding for hospitals, testing and state and local governments, The Times reported.
Myrick, who has also called for the implementation of a temporary universal basic income, thanked Sens. Schumer and Kirsten Gillibrand (D-N.Y.) for “fighting for frontline workers.” Schumer, the Senate minority leader, called for support for local governments on Twitter on Tuesday.
“State, localities [and] tribal governments need support,” he wrote.
In the event Ithaca receives no federal assistance, Myrick expects the city to face significant budget deficits this year. City officials expect a $6 to 13 million reduction in revenue this year — roughly between 9 and 19 percent of Ithaca’s $70 million annual budget, Myrick said.
Over 35 percent of Ithaca’s revenue comes from sales taxes, meaning a widespread slowdown in retail can quickly drain the city’s coffers.
“The federal government is sending money to individuals and sending money to businesses without recognizing that if there are no more transactions, there is no more sales tax,” Myrick said. “Every time you buy a sandwich at CTB or go shopping at Wegmans, you pay a sales tax. With the businesses closed down, there is no more sales tax to collect.”
“I have told them that to get this economy working again, they have to fund cities, otherwise there will not be a functioning infrastructure to return to,” Myrick said.
Myrick added that the city did not receive any direct funding from Cornell or the state to make up for the city’s budget shortfall. While New York State passed a $177 billion budget on April 2, the state anticipates losing at least $10 billion in tax revenue. State officials hope spending cuts, federal assistance and short-term loans will mitigate the losses caused by the pandemic.
From this year’s budget, Ithaca received $2,610,398 in Aid and Incentives Municipality funding — the same amount it received during the previous fiscal year.
“The things people have come to rely on, everything from youth services to public safety, will be impacted,” Myrick said. “We have to decide how many layoffs, how many furloughs.”