A coalition of mayors are asking Sen. McSally to break with Senator Mitch McConnell and reject plans that would allow municipalities to go bankrupt instead of receive federal funding for pandemic relief.
A growing number of Arizona mayors are pushing back against Sen. Martha McSally’s comments that local municipalities are undeserving of federal pandemic aid due to mismanagement.
The controversy began during a public town hall on April 29 with Mayor Skip Hall of Surprise, Ariz. McSally claimed federal relief funds allocated to Phoenix, Tucson, and Mesa would be distributed throughout the state, and rejected the idea of further funding for smaller municipalities.
Instead, she blamed local leaders for poor management.
“On any funding, I’m just going to be frank with you guys, OK?,” McSally said. “This is not the time for states and cities – unlike Arizona, unlike Surprise – who have mismanaged their budgets over the course of many decades, for them to use this as an opportunity to see you, as a taxpayer in Arizona, as a cash cow for them.”
Arizona cities across the state have been tightening their belts and revising budget forecasts as financial impacts caused by the coronavirus outbreak take hold in metropolitan areas and rural counties alike.
Steps already being implemented or under consideration by Arizona cities include: freezing hiring, putting projects on hold, and foregoing planned equipment purchases. At least two Phoenix suburbs and Page in northern Arizona are already laying off or furloughing workers.
State budget analysts project significant drops in tax revenue, including sales tax collections, which are a major source of funding for cities. Meanwhile, fuel taxes that help pay for transportation projects also will be reduced as Arizonans drive fewer miles.
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Mayor Hall, whose city went from a $7.5 million budget surplus in February to a $15 million deficit as a direct result of the coronavirus pandemic, said he was surprised by the senator’s comments. Several mayors have since joined Hall in voicing their concerns.
“In previous conversations, Sen. McSally had indicated a desire to help local communities,” said Fountain Hills Mayor Ginny Dickey. “We don’t have programs set up, or the resources to assist our residents and our businesses at this time of crisis. We don’t need a bailout. We haven’t had past spending or financial mismanagement issues that are being ascribed to us.”
Despite assuring Dickey that she would support aid to help local governments, McSally has sided with Senate Majority leader Mitch McConnell in opposing further coronavirus relief for cities and towns. Of the two relief packages passed, aid was only allotted to cities with populations of 500,000 or more. Only three cities in the state qualified for relief funds.
“Right now is a crucial time where we need Sen. McSally to show independence from Mitch McConnell, and call on him to disavow any notion of states and cities being forced to declare bankruptcy,” said Tolleson Mayor Anna Tovar. “We are on the frontlines of COVID-19 response, providing essential services for millions of Arizonans. Sen. McSally must understand that cities and towns are essential in the COVID-19 response, recovery, and reopen efforts.”
While McSally praised the city of Surprise during the town hall, she remained adamant that smaller cities were undeserving of federal funds. She further said that instead of providing more funding, local governments should wait for money to trickle down from other cities.
“We’ve already given $150 billion in state stabilization money that three cities in Arizona got directly from the federal government – that’s Mesa, Tucson, and Phoenix,” McSally said. “The rest of the money will flow through the state to the cities.”
But mayors like Coral Evans of Flagstaff and Mila Besich-Lira of Superior have pushed back on this idea, calling it unrealistic and impractical.
“I think it’s wonderful that larger cities are able to have this money to shore up support for their communities and organizations,” said Besich-Lira. “They need that money. They have larger populations. But in our smaller communities, we have just the same amount of need, but that money does not necessarily trickle down. In fact it becomes more and more competitive because that need is so great.”
While Arizona’s three largest cities have received federal aid, budget deficits make any trickle-down unlikely. Phoenix now faces a projected $26 million shortfall instead of a $28 million surplus. “And that’s after accounting for spending reductions and a hiring freeze instituted on March 19,” City Manager Ed Zuercher said.
Additional options being considered include selling surplus land, not replacing aging vehicles, and trimming payments to the pension fund for city workers, azfamily.com reported.
“I believe we have even more difficult decisions in front of us,” Mayor Kate Gallego said during Monday’s City Council meeting.
Zuercher has asked each department to list cuts adding up to 25% in case they’re needed, Gallego noted. “We are trying to tighten our belts along with everyone.”
“We are definitely in the middle of a recession now, with these jobless rates,” said city Budget and Finance Director Mark Woodfill.
Woodfill plans to present the City Council with a revised budget proposal with “a lot of contingencies,” and he suggested leaving open the possibility of a property tax increase.
Publishing a notice of intent wouldn’t require the council to take the step, he said, but it would leave the option open until June when a final decision would have to be made and more is known about the economy.
The idea that funding should be withheld stems from McConnell, who has publicly stated that funding for municipalities would result in Republican-led regions bailing out areas led by Democrats. He has called on fellow party members like McSally to unify against further funding, instead encouraging proposals that would allow cities and towns to file for bankruptcy.
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Coral Evan, Mayor of Flagstaff, believes McSally needs to show independence from Republican leaders and look at what Arizonans need. When asked about McSally’s comments, Evans said she believed the senator was letting political games get in the way of helping those in need.
“I think statements like that are unnecessarily divisive. This should not be an ‘us versus them,’ this is not a ‘big city versus a little city,’” Evans said. “This is about all Arizona residents being able to benefit from the federal funding that was allocated.”
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