Cities krs the u. S. From the urban institute this runs an hour. Were about to hear some very good Economic News after recordbreaking declines in economical activity in the Second Quarter of 2020, well be see eyepopping consensus, 25 growth in the third quarter. We should not lose sight of what that means for people who are still struggling and the fact that we still have a deep hole to climb out of. Much has been written about the kshape recovery. Workers at the low end of the distribution who dont have options to work from home and for whom federal help has already been paid in a way. Weve seen who will owedout downtowns with fewer workers coming in, buying lattes. What does that mean for city revenues . One estimate suggests its in highrent zip codes, highrent districts, employment is still at 45 of precovid levels. So we are about to explore these things today. We also have a blog my colleague and i have a black about what this means for cities and each industrys mix and, of course, their exposure to covid as well as the uncertainty of federal and state response. If i could get to the next slide, please. Uhoh. There we go. The point of our blog is really that going into this, there were a we thought we knew about city economi economies. It was thought to be a Success Story if you were a service economy. Now many of those jobs are under threat. Similarly, we used to think that cities that this successfully evaded the property tax revolt by diversifying Revenue Sources into things like charges and fees for services having few of those taxes and not your reside residents, we thought to think of those cities at winners. So access to personal income tax or sales and use taxes. Now those revenues are vulnerable just like they are at the state level. This is from our blog today that basically shows for most sficit, sals and income taxes. If you add up fees and other little taxes that accounts for 40 of revenues, especially in big cities. Of course theres a lot of variations. Were very likely to have a panel today that can represent that diversity of experiences and different types of cities. Ill now introduce our panelists. Mayor andy berke from chattanooga, tennessee. A former twoterm state senator. He can speak to the perspective of states. He may have some insights on that experience and has won numerous awards, which i wont go into here. Legislator of the year, friend of education. Municipal leader of the year. He holds a jv from the university of Chicago Law School and bachelor degree from stanford. Carolyn coleman is a leader and advocate in private sectors, now the executive director of california cities, spent the decade here in washington, d. C. Where she can speak to the national perspective, director of federal add voeks a. Deputy mayor of the city of indianapolis where she sfoek used on Affordable Housing and Community Engagement initiatives and is on many boards of directors including school of law and the university of minneapolis. Mayor Michael Nutter is a former twoterm mayor of philadelphia with almost 15 years of experience as well on the city council, the inaugural david denkins professor at Columbia University school of international and public affairs, senior fellow for the what works citys program and a member of the external Advisory Board for jp morgan initiative. Past president of the u. S. Conference of mayors and serves on various boards including the urban institute. Welcome to you all. Thank you for being here. Thank you. I was going to start with you, carolyn, since the lead of california cities published a report referencing cities of california. I know youre well versed in that. Can you give us a birds eye view both from the state and National Level . Im happy to do that, tracy. First, i want to thank you for putting together this conversation and also to thank the urban institute for this important conversation. Its always good for me to spend time with two of my favorite mayors, albeit one is outside of california. Good to be here with both of you. I thought i would start with a little bit of whats happening fiscally in california cities as well as part of the National View thanks to the National League of cities. Lets go back to january of 2020. City revenues were finally returning to the prerate recession levels with reserves and revenues trending positive. We werent out of the woods. Things were looking up. In march of 2020 as the covid19 took hold, u. S. Economy went into a freefall. At the local level we began to close down our local economies to prevent the spread of covid19. The impact was swift. We had to close businesses, retail sales plummeted. Unemployment sky rocketed and uncertainty was the name of the day. The fiscal impact of these swift changes were felt immediately on city budgets. Sales and Income Tax Revenues were the first to be hit and cities that rely on those sources were forced to take immediate action as the shortfalls began. In some cities even property tax revenues started to show signs of weakening as the economic hardships began to dampen on demand for real estate. Not quite the case in california but certainly in other cities. I do just want to point out that given that most Cities Fiscal year 20 budget captures only a few months of the pandemic recession. It is the fiscal 21 year budgets that for most cities started july 1 that were more fully the fiscal impacts felt by cities across the country. At some point i truly believe when we look back, the toll of this pandemic on our economies could easily be more severe than that which we experienced during the Great Recession. I know well talk more about that in a few minutes. If you look at this first slide from the National League of cities 2020 fiscal condition survey, the next slide. You will see the breadth and depth of the challenges facing city budgets. According to city fiscal officers from across the country, nearly 90 of cities will be less able in fiscal year 21 than in 2020 to meet the needs of their communities. In fact, our current estimates for 2020 put year over year General Revenue Fund growth at near zero. Its been a long time since weve been at zero. On average youll see in the next slide cities anticipate a 13 decline in fiscal year 21 general Fund Revenues over what they had in 2020. Unlike the Great Recession, the impact on city budgets of covid were immediate and deep. This is not something that was gradual, that played out over 18 months or so, which is what we experienced with the Great Recession. Now i want to take a look at more specifically about what happened in california. By april 2020, just four months into the year, california cities were facing a 7 billion revenue short fall in their general Fund Revenues due to covid19. You look at the next slide, you could see that the impact of covid19 while its being felt across all of the Revenue Streams that tracy highlighted earlier, its being felt most acutely in our sales taxes and not surprisingly in our hotel bed taxes. Im in a state thats noe known for its Recreational Activities and tourism, sales and these transient occupancy taxes are key to local government Revenue Streams, and those have been severely hit. For cities, these Revenues Fund essential what i like to call bread and butter services in our communities. Services like police and fire, code enforcement, street maintenance, filling potholes. They also fund millions of Public Sector jobs. Its those jobs that are vital to a strong middle class in our country. If you look at the next slide youll see these revenue short falls in california, and im sure that my colleagues from across the country in every state has put together these kinds of numbers and certainly the National League of cities has done it as well. These short falls will have real consequences. With states facing their own budget challenges and the federal government so far providing only minimal relief to cities, we are having to go it alone. But with balanced budget requirements and revenue raising restrictions, cities are going to have no choice but to cut services, lay off workers, freeze hiring, and roll back capital projects, which is the very investment we need in our communities. As we begin to look beyond 2020, cities continue and will continue to face economic and fiscal uncertainty. Tracy, i hoped some of the good news you shared a few minutes ago does come to fruition, because our cities are going to be focused on trying to keep their communities safe from a surge in covid19 and whatever happens with the flu, but were also going to be trying to reopen our local economies and to be able to do so in a very safe fashion. I think it is precisely times like these where cities need the federal government to step up and provide assistance. Its the smart thing to do and its the right thing to do. Thank you so much, carolyn. That was just perfect in terms of the overview. I would like to turn to mayor berke and hear about whats going on the ground in your city. I know you enacted a budget that includes many of the solutions that carolyn mentioned. Had an more can you say about that . Yes. And thanks again to the urban institute and to you, tracy. It is a pleasure beyond with carolyn, who ive gotten to know over the years. Mayor nutter is someone who not only do i admire, but i know every mayor around the country is a mayor nutter fan. Great to be on with him and appreciate yall. Let me put a face to some of the things that carolyn is talking about. And to make it more explicit, lets try to back up and say a little bit about chattanooga. Chattanooga is a solidly midsized city, about 180,000person city in a county that is 375,000, and a metro that is 575,000, were squarely at the center of that donut. So we have all the things going on that midsized cities have. But we also have been doing a little bit better than most. Weve been a bit of an it city. Forbes said chattanooga would be the number one for jobs. I have to say that as a brag, mayor nutter understands that. You get paid per brag. We were fundamentally in a good position. City government built up our reserves. We had virtually twice the reserves going into march 2020 that we had going into 2009. And lots of things were going right. We had a bit of an it vibe going on. All of a sudden, covid hits, and things change immediately. We see it in Small Businesses that dont have 60 days of cash reserve. We see it in our hospitality industry, which had been going like gangbusters. Hotels going up everywhere. All of a sudden rooms start to decline. We see it, of course, in city coffers because tennessee has zero income tax. Its against our constitution. We have sales tax and we have Hotel Motel Tax are our two main sources of revenue, apart from the dollars we get from other governmental sources like state and federal. And all of a sudden, that just started to vanish. And so as we hit the budget, this budget that we had started to put together and we were on a july 1 fiscal year. So, we had been anticipating putting together this really robust initiative that expanded the services that we need, that we were giving to people and also huge capital projects. That went away. Instead we were dealing with with setting aside money for Small Businesses, to help them survive and ride out the pandemic of closures. We were setting aside money for enhanced service for people in our community to beef up Immediate Response to homelessness, which of course no matter what youre talking about with eviction and those have gone away, you see increased homelessness in a world of 10 unemployment. All those things took precedent. At the same time, and then ill turn it back to you, tracy, i want to give poom an idea of what it looks like in real world when you enact these freezes. Its one thing to say its a freeze. Everybody says okay, thats fine. And we were lucky we didnt layoff or furlough anybody. But the realworld consequence is we freeze our fire department. That means we dont have an academy, which puts us down 30 firefighters. At the same time a Global Pandemic is going on and another 25 firefighters are out at any given time because either theyve been exposed or theyve gotten covid. Now were down 55 firefighters. And thats just one of the myriad of things that the City Government does. And thats the realworld impact of not being able to take a really studied approach to how you reduce services, but to just be in an emergency where you just freeze everything and you are where you are. Uhhuh. Uhhuh. Thank you so much. Carolyn, you had mentioned the similarity and differences with the Great Recession. I cant help but plug an article that was done that says sales tax were worse than the Great Recession. I want to invite mayor nutter to comment on similarities and differences to the last recession that you might have to rename because apparently it was not so great or is not so great anymore compared to this. Thank you, tracy. And certainly to my great colleagues, carolyn and mayor berke. You know, a dozen years ago, when we hadnt even figured out that we were in recession yet, the summer of 2008, six months, seven months into my first year of my first term, and my chief of staff and finance director said they needed to talk to me. Clearly, i was a rookie and didnt realize that when your chief of staff and finance director need to talk to you immediately, i should have known to just run and not take that call. Thats a call you dont want. Theres no good news coming out of that call. But i didnt know. So we met. And they said well this is, again, the summer of 2008. Were not exactly sure whats going on but were seeing some unusual signs of lack of revenue, lack of collections. But well monitor it. Maybe its just a blip or an anomaly or something. So, you know, best of luck. I got that call again in august. Still hadnt learned the fundamental lesson of not taking that call or meeting. But nonetheless, you know, im a little slow on the uptake. They said theres definitely something going on. We have a problem. Were actually starting to run out of money. I said well, we just passed a budget in may that was balanced. We made investments. We spent some money. We werent frifvolous, but we spent some money. Finally in september the federal government announced that the economy had gone into recession actually back in december of 2007. So, it was a bit of a glide, if you will, into it. It just continued. As carolyn said, for some time. You make steps. You plug a hole, another hole would pop open. In this scenario, i came home from new york on the night of march 12th and on the morning of march 13th, the state announced immediate stayhome orders. And all of us basically, regardless of city, almost anywhere in the country, suddenly the economy started to shut down. People had to stay to shut down. People had to stay home. Businesses closed. Folks werent sure what their job situation was. So it was immediate. In its impact. We talked about, and caroline had some slides up. Not only is the City Government negatively impacted, of course the state, philly is a city and county, but also our School District, which heavily relies on property tax to fund the education of our children. So the city will have its own fiscal challenges and the School District at the same time. And the city and state are the primary funders of education in the commonwealth of pennsylvania. And so in 20089 we didnt make businesses close. They closed some on their own because of an economic worldwide crisis. This was a Health Crisis that led to an economic crisis and we had to close to keep people away from each other to save lives. And so in a bizarre kind of way this is a selfinflicted massive wound in order to try to save lives. And save people. So its that much more complicated. And lastly, theres no end date. Theres been a slow reoechg but there are many, many businesses, not just in philadelphia but across the United States of america, that have not reopened. Some unfortunately because weve now all been in the house six months, seven months, depending on your calendar . Will never reopen. Thats a hit economically but more in human terms to those individuals. Many cities have not fully recovered from 10, 11, 12 years ago and now find themselves under even more severe pressure. Mmhmm. I think theres sort of a good news bad news story in a way that to make you feel better about the selfinflicted damage. The research ive seen say even place thats were late to adopt this skill had a big drop in consumption. Because people were scared. Its selfinflicted but its also something you cant undo by taking off the stayathome order. People are going to show up and go back in the marketplace when theyre good and ready. Right. I think dr. Fauci has said that the virus will ultimately decide what happens here. Exactly. I just wonder what this means again about sort of what we think of as a healthy city. Mayor berke, you had talked about the idea of creating Magic Moments in chattanooga and those were all based on being a center for hospitality. Can you talk a little about sort of what you see as your vision of the city Going Forward . Has it changed or are you just sort of hoping to ride this out . Well, we are at the urban institute, so we have to use the word density at least a few times. You know, for the first seven years that i was mayor i ran around saying the word density everywhere, weve got to create density. And if you thought about whats going on in the world around us we had so much generic that was so easily available to people and so cheap that i would say either unique moment or magical moments was what i would talk about. How do we create that . And the answer was density. Its through entertainment and the times that we spend with others because to me at least the one thing that we could create in cities that you couldnt get anywhere else was that experience that this is the only time and the only place that youll be able to have this experience. And thats what was making sports and music and all those other things, inperson dining, so valuable. Six months ago after seven years i 1207d saying density, density, density, and started saying no density, no density, no density anywhere. And thats been a huge change. Even by the way as we continue to have these spectacular projects for parks and other transformative urban spaces that, you know, ultimately one of the great things is people will be able to gather in large groups. I mean, i do think that we are in a position right now where our personal habits are changing and i know from my experience if my wife and i receive an invitation to something and its a zoom, webinar type circumstance were like okay, great, we can just sit in our living room and do this and turn off the camera and, you know, not dress up and that sounds really good. So we dont do any of these inperson things. I do think that there are limits to this. And that it may be a long time, and i dont expect it to be short, but we will eventually start to find ways when we feel safer. I think a big piece of this is i dont feel safe going into large crowds. I dont feel safe. I dont do we have inperson dining open in our state. I dont do it. But there will be a moment where i feel safe again and i do start to miss those start to think oh, this great experience is happening and it feels safe and it feels natural and it feels right. And cities have always come back. They will always come back because there are magical and unique things that happen there that cannot happen anyplace else. Mmhmm. Now, i wanted to talk more about what it looks like when cities come back. Carolyn, i had said something in one of our earlier conversations about how you really should think of every dollar that a city spends as a service or a job. Can you sort of talk about what a city looks like if its cut its budget and what kind of services, businesses, residents should be expecting when cities do start to come out of this . Yeah. Boy, i wish we could predict the future a little better. I think what mayor berke highlights and what mayor nutter highlights is theres so much uncertainty around what happens when i hear people say when we come out of this pandemic or when the pandemic is over. Im not sure thats the phrase were going to be using as much as it is were going to be living with this and were going to adapt how we do that. You know, i often hear folks, we think about budget cuts in cities, think about it just in terms of a dollar. We just need to balance the budget and cut a dollar here, cut a dollar there. But every dollar that a city spends funds a salary or it funds a service that that community has prioritized as something it needs. Im sure both of these mayors can give you many stories about constituents, the meetings theyve been in, and the need for more police service, the need for better trash pickup. Somebody always needs a pothole 23i8d in a community. So when we take away a dollar, we take away the person or the contractor who actually delivers that service. I think really important to keep in mind when we take away the dollar and it takes away the Public Safety, the Public Service job. Those are the folks who are at the heart of our communities. I talk a lot about the local government workforce, which is probably in the 50 millions across this country. Losing those jobs, and at this point weve lost over a million of them, thats real and it goes to the heart of the people who are living in our communities and providing those services day to day. So its not its not just about the dollar but there are people behind the dollar and there are services particularly during this pandemic. Im sitting out here in the middle of a state that has wildfires, 28 of them going on at this moment in time. Those dollars fund the people who are keeping us safe. And we cant have it both ways. We cant slash city budgets and expect fires to be put out and to expect there to be resources to address the pandemic so that we can open our communities safely. Weve got to do both. Thats why ill continue to come back to we need a better partner in the federal government to help us out. Absolutely. Yeah. I do want to talk about that in a second. I cant resist asking mayor nutter, what does that look like in philadelphia as the city was coming back with a diminished workforce . Because i know look at the data there are some areas of local employment that never came back from the Great Recession, especially for noneducation jobs that people might have to be putting a face to. Do you feel like it costs money to hire someone, to train someone, to get them ready to do the job. What does that look like for you . Well, there are a couple things. First of all, i mean, we were i made a decision that and this is not to compare and contrast philadelphia to any other place because every place is different. But made it the initial decision was that we would not do massive layoffs. This is a city that was already challenged from an employment standpoint, high poverty rate, philadelphia unfortunately always has the highest poverty rate of the ten largest cities in the United States of america. Its been over 20 for now 40 years, and it is in a generation al and deeply entrenched. We can talk more about that a little later. But also i did not want to damage the heart and soul of the government which there are so many things that you can use technology more, you can mechanize, but there are many, Many Services where you actually do need people. And so what i was constantly thinking about while were in the recession was that one day this will be over. Wed like to take the same thing about covid19. But i did actually believe that this part of the Great Recession back at that time would end and that we had to have the people in place to be able to provide services to even carry us through the recession and benefit from recovery. But in that moment you also had to rethink all the services youre providing and all the people who are doing all this work, do we need to continue to do all of these things . Are we the best provider of that service . And as both carolyn and the mayor said, yes. There is a constituency for every service. Unfortunately, it just doesnt necessarily mean that we should be the provider of it or that we can. And so when the team comes to you and says here are your options, i can assure you that its a series of all bad options. And what youre trying to figure out is the least worst of those options. How do you protect Public Safety . How do you look after your most vulnerable population . How do you protect the heart and soul of the government . I mean, someone has to take in the few dollars that are being sent, that people are still paying their taxes. Someones got to deal with payroll. Employees need to get paid. Debt service. Other obligations that you have to pay. You know, your social services, your prisons. These are mandated. Obligations that you have. Someone has to provide those services. And so we did shrink the government. We did stop providing some services. But i can assure you, tracy, that local governments cannot cut their way out of these recessions. We talked about a shared sacrifice. It was half cuts. And we also raised revenue, also known as new taxes. But i would say, and i know you want to get to it, but we also had a great partner. In the federal government. Seven of my eight years i served with president obama, Vice President bidens administration. So we had the economic recovery. We had the stimulus. We had tiga. We had ara. There were a million calls and a coordinated strategy. Nationally the cities, u. S. Conference of mayors, National Association of counties, all of us trying to figure out and working in partnership how many calls, carolyn knows this, and the mayor may as well. How many calls with valerie jarrett, president obama, secretary napolitano, secretary johnson, Shawn Donovan at hud. Every cabinet secretary hosting some kind of call to try to help us as cities. We were not alone in this. And i have to say today as i talk to a bunch of mayors and another mayor does and carolyn does as well, but many of these cities today feel that they are on their own. They are just out there, struggling, trying to make something happen and that washington has really kind of checked out. And that is a big difference between 08 and 2020. Its a difference from natural disasters and other well, heres the thing. You had states literally on ebay competing with each other trying to buy personal protective equipment. You had cities scrambling on their own with their Hospital Systems trying to figure all of this out. There is still, seven months later, there is still no known National Strategy to deal with covid19. Now, if it was a hurricane, if it was a tsunami, if it was Severe Weather event, you know, 25 inches of snow, whatever the case may be, there are plans to deal with that. Youre not alone. You ask everyone to stay at home so you can clear the streets. And then eventually it melts or you move it or you do something with it and you slowly bring your city back to life. There is nothing and no indication of when any of this will come to a conclusion, so folks are just kind of hanging on and trying to ride this thing out, however far it goes. You know, im not a debbie im actually a very optimistic person. So im not trying to be down in the dumps. But it is real. When you have to make these decisions. That mayors are facing every day. Mmhmm. And i wanted to invite mayor berke to talk about, you know, it seems to me like local governments and states are also scrambling to develop guidelines and the options of a clear path from the federal guidance and sometimes those guidelines are conflicting. We had a superintendent that said at one point it was 25 students per classroom and then it was 16. These have real effect as you were talking about with the firefighter example too, that its not easy to reconfigure your classrooms and to, you know, redeploy your school buses. What has that been like for you as a local official . Weve really seen federalism stretched to its limits here. Again, think about chattanooga. So we have the federal government. We have the State Government. We have the county government because chattanoogas the middle of that donut. And then we have City Government. And unlike most things, for the most part at least in our way of government the county does much of the support but is generally not the lead except for on schools and health. Those are the places where the county is the lead. And so here weve had over the last six months the federal government i dont know that we can say the federal government is on a different page from somebody else because theres different responses within the federal government as well. We have different comments. The state is on a different page from them. The county and the city have not been able to get together on what should be happening. So people when communication is one of the most important pieces of a Public Health response, people are hearing at least four different four different messages, all from people that theyre supposed to trust. And things are, you know, staggered in just unbelievable ways. And so instead of really making it easy for people, weve made it extremely hard for them. At the same time this takes place in a dynamic where especially in a place and carolyn has a little bit of a different political piece, but you have the red state blue city piece going on in a state like tennessee where on a fundamental level the State Government has not been responsive to cities now for years on what they want and this is another reason to say you know what, you need to cut your services more, you need to scale back. And this has been really troubling to me. In the long run i think there is a way to get back there. But a Global Pandemic is not conducive to four different responses. Ill leave you with this. Think about this. So chattanooga is on the line with georgia. And in fact there are suburbs of us that are right over the line. And so as we think about things now, we have a mask mandate in hamilton candidate but no rural county around us has one and neither does anybody in northern georgia. That affects our hospitals. That affects our workforce. That affects everything that we are doing so at some point we have to say to ourselves were dealing with a Global Pandemic that does not respond to the little lines we draw on a map and we need a coordinated response instead of multiple layers deciding what they should do thats different from each other. Mmhmm. Tracy, if i could add to that, ive heard it in the comments from both of the mayors. I mean, a recovery is going to depend a great deal on confidence by the general public in the health system. And if we keep hearing four different viewpoints on is it safe, isnt it safe, what should you do, and the private sector in many cases is just as confused about what they can do and what they cant do, were really setting ourselves so far back in getting the public confident again that they can go shop, that they can go dine, that they can get on airplanes and get back to some semblance of whatever normalcy is of course at this point. And if we cant get it together, then our recovery from this pandemic is going to be twice what it might normally be. We have people in america debating whether or not you should wear a mask. I mean, were seven months into this. Like im confused. What are you talking about . Right . You dont have to be madam curie to figure out that that might be helpful to yourself or to someone else. So if were at that fundamental of a level in this discussion, then how do you get to being in a slightly more crowded place, even outdoors . What happens indoors . Go back to school, k to 12, college. Go into an office building. I mean, it all builds on each other. And as carolyn said, its about confidence. And then my goodness, you know, what will happen one day when theres quote unquote a vaccine . And then that next level of debate. Who gets it . Why . Im not taking it. I dont have to. You know, all of those kinds of issues. We have some Serious Trust and credibility issues. At a time of enormous crisis. Beyond adding in the political mix. Mmhmm. Were going to go to q a in a minute. So i just want to remind everyone to please submit your questions using the q a function. But i wanted to go back to carolyn for a second. Because if things didnt seem daunting enough already, im a californian and by birth. And i know that that state, you know, is dealing with a lot of big issues before this crisis, income inequality, homelessness, housing affordability. Those issues are not going away. If anything, theyre getting worse in a Public Health emergency. Mayors have no choice but to try lead through adversity. What kinds of leadership are you seeing or what do you expect to see . Well, i think whether im talking about California City officials or ones from tennessee or philadelphia, pennsylvania, theres just a pragmatism that happens at the local level. And yes, prepandemic, like many other states, cities and states across the country, were dealing with challenges around housing affordability, homelessness, Public Safety. We always need more infrastructure investment, can never get enough of that. It keeps our community strong. And the impact of this pandemic is only exacerbated. The underlying challenges that were already in place. And so you know, weve got some choices at the local level. If we have to go it alone. Certainly thats going to be difficult. But i dont know of a local official whos going to walk away from that. Theyre going to look at the resources they have. The assets they have in place. The private sector partnerships they can make as mayor nutter mentioned, they make choices about who delivers what service. And theyre going to find ways to forge ahead. If eyre fortunate in the short term the state and federal government will follow our lead and make the investments that we need them to make in the local government. At the end of the day the nations gdp doesnt rebound and get strong again unless our cities do because were the economic engines of this country. Were the places where innovation happens. Were the places where over 80 of the residents in our country reside. And so recovery will start with us. And i continue to look forward to local leaders taking the lead on this in the coming months. If i can just add to that, cities right now, i can say this as a mayor, weve got a Global Pandemic. Weve got an economic crisis thats going on. We have a reckoning for 400 years of racial injustice. We have to me the psychological issues that come from all this turmoil together, and this is a huge challenge for all of us. And this is only going to be worth it if we can come back better and stronger. And there is a way for us to do this, but we have to have a partner in the federal government to make that happen. We just have to have a partner. And the main reason for that is because we only can as mayor nutter said, he raised revenues but we cant do that in a progressive way. When we raise revenues at the city level, that hurts the people who are already struggling the most and were going to have tremendous problems with inequality that have only been exacerbated. We have to have at some point revenue raised that helps with some of these problems that comes from the federal level just because thats the only way we can deal with these problems. We cannot do that, we cant revenue our way out of this on the local level. Any additional revenue at some point weve got to get the federal partnership. Mmhmm. I sometimes think of this as an economic aftrosteroid that has. Or you can use a weather analogy. Its been a cat size hurricane across the country. Local governments raise revenues in a way that will help them solve this crisis. Which leads to a question thats been on my mind that also has come up from the audience about balanced budget rules. I think a couple of you mentioned that cities went into this with unprecedented budget reserves but not enough to deal with this crisis. But balanced budgets rules were adopted in response to a financial panic in the 19th century. It seems to me that theres no way that institutions that were appropriate in the 19th century are appropriate in the 20th century. Which does not mean we should get rid of them for all my bond market friends that might be listening. But is there a way to modernize these institutions to respect the increasing volatility of revenues, the increasing volatility of economies, that just makes sense for the world that were in these days . You know, i mean, tracy, i think those measures were put into place i mean, i wasnt around at that time. But ive read a little bit about it. You know, i think that takes us down a pretty steep and slippery slope. In philly because of a previous financial crisis in the 80s into the 90s, we have an oversight entity which i think is about to expire but issued bonds back in the 90s and brought the city back literally from the brink of bankruptcy. Required us to file fiveyear plans. Our charter requires a balanced budget. Unlike the federal government. Because we dont print money, right . We have to have a balanced budget. You cant spend more than you have. That level of fiscal discipline i think is critically important and if you start removing, tinkering with some of those rules you will find cities literally going bankrupt, going out of business. And so. And you know, certainly the rating agencies would go crazy. Your ability to borrow would go Interest Rates would go through the roof. I think that is potentially the worst. Selfinflicted wound. It is absolutely mortgaging the future to try to live in current times. I agree with mayor berke. This is about an infusion of significant dollars from an outside source for the sake of the country and as carolyn mentioned for the sake of the national economy. And let me add to that that, you know, i think the balanced budget, at least for us, does a couple of things. Number one, it adds to local credibility, which is actually really credibility and trust is in short supply right now in government. And its great for us to have it. The second piece is that we dont control the treasury. We dont control the fed. And so the federal government when it comes to debt has some huge advantages on us and being unbalanced. They just have different Resources Available to them that we dont. So its more dangerous for us to do this than the federal government. Let me i will say it just is and i say this all the time. Its like economics 101 right now that we should try to get every dollar that we have out on the street that we can responsibly use. It is important for us to continue to do capital projects, to maybe borrow a little bit more now than we usually would, to pay back. Because as i said earlier, you know, were aaa bonded rated. Rated city. So we can do some things that other people cant. And weve got to make sure that were doing those. But i think that kind of figuring out what those are and then still saying hey, but for cities on this local level who dont have income taxation, who dont have progressive taxation, for us to ramp up our spend area and go out of balance is a different situation than for the federal government to do it. Question also about sales taxes. And i guess this persons pointing out that the negative expectations are contrary to relatively flat retail and Food Service Activity at least through august. I guess i would just add to that that beyond restaurants, or food services, there are many other things that are part of the retail Sales Tax Base and there are differences in the cap treatment of things like food to go versus food thats consumes in a restaurant. But im going to piggyback on that. If we could just talk about expectations for sales taxes and also property taxes. I think it came up earlier that, you know, property taxes tend to be more stable. The last recession was a housingcentered recession. So it did affect property taxes np this case the link is not as direct. Nevertheless, if there are commercial buildings that are not seeing rents they might be appealing their property taxes or their assessment levels. Maybe some homeowners will do that as well if theyre losing their jobs. I just wonder if you could all comment on specific revenues. I could at least start with that for chattanooga. Just to give you an idea, chat nooga is about 270 million operating budget, about 50 million of capital per year, and then 100 million for waste water and some other dedicated funds. End up being about 420 million or so. And things have been, because of the cares act and the 600 per week that has been hugely beneficial to cities like ours, and so we havent seen the massive drop. But there is huge we have huge issues in our Entertainment Industry and our hospitality industry. We have huge sectors of our city that are doing are just really struggling. Particularly local businesses. Particularly businesses owned by people of color. And so when it comes to our sales tax, what we budgeted for this year on our operations dollars was an 8. 5 million loss, which is just a little over 3 . Now, when you say relatively fat, 3 loss is relatively flat. But our costs continue to go up and our health care and Everything Else costs more. And 3 1 2 may not a little over 3 may not sound like a lot, but 8. 5 million for us, you know, is a very significant loss at a time where expectations and need among our constituents is growing by leaps and bounds. And again, our general the general piece is that our sales tax because again, were a bit of an it city. Has been growing in the neighborhood of 10 . So seeing a 4 or 5 , you know, drop year to year as opposed to a 10 increase is a massive difference for us. And you mentioned some expenditures that were going up because of covid. The federal government is reimbursing a lot of those costs right now through the cares act. But that funding goes away at the end of this year. And i think carolyn said in the beginning the worst year is going to be fiscal 2021 and many people are projecting its effects will go as far as fiscal 2024. It will be nice to have help on the revenue shortfall as well as the increased need for spending directly related to the pandemic. Before you end that let me just say again on this red state, blue city thing that those dollars went to the states, not to the cities. Only the states where people want to reimburse cities that thats actually happening. Because you did not grow to 500,000 people overnight and qualify for the limited exactly. Thank you. I want to also talk about the long run issue we were talking about before, poverty. There are a couple of questions that came up. Mayor nutter, just based on sort of what you know now about poverty or the way the problem has changed and now its a lot in response to automation and other kind of secular trends, what are three things that you might have done differently as mayor or i guess inviting all of you what do you see as poverty combating strategies that mayors are going to be looking at in the next several years since its really mayors on the front lines of this battle . You know, tracy, the first thing is certainly coming into the Mayors Office in 2008 it was mentioned ive been a City Council Member for a while, lifelong philadelphian. Et cetera. Ive known that we have a poverty challenge and have had one for a long period of time. I think, you know, in retrospect, i mean, i would have loved to have started our work on developing, which we eventually did, our antipoverty plan. But quite honestly and bluntly, the recession got in the way. You can only do so many things at a time. And when youre trying to literally save the city from, you know, the brink of running out of money its just that much more difficult to work on such massive issues. But we did get to it and did develop a plan. Its still being utilized after my time, shared prosperity philadelphia. The poverty rate actually has come down over the past few years. It went up during the recession. And has slowly, you know, kind of come back down. But this is really about education. Its about skills. Its about training. We have hundreds of thousands of people not reading, you know, at a level that they could get work. Computer literacy. A variety of things. That recession, this recession, and a Health Crisis. How do we retrain . Americans again for the jobs in the future. Not the jobs that have gone away. And at the same time philadelphias bolstered by heavy presence of education and medicine organizations and some 37 of the jobs in philadelphia, many of which do not require a fouryear bachelors degree. So training, certificates and the like i think will be helpful to leading philadelphia and many other cities out of the current economic crisis. But yeah, i wish we had been able to start earlier. But you know, we were literally trying to save the city from going broke. Tracy, i would say in california i dont know that nationwide we saw as much of this coming out of the Great Recession even as mayor nutter talked about it. Theres an antipoverty plan that sort of got put on hold. Then we focused on recovery. What ive seen here with a number of city officials and the governor, im actually injecting an equity component into the recovery plans. So were going to try to capture that moment. Its obviously early. But since were already a state dealing with tremendous inequities around the state we know that people of color were disproportionately impacted by covid. We have an opportunity in the recovery to do some correction on that. Yeah. Mayor berke, is there anything you wanted to say on that . I think theyre right. You know, weve got first weve got to make things safe. Were still not at a point where things are safe. And then weve really got to focus on poverty. And to me moving people to the middle class, weve seen that erode over time in our entire country. And cities can be great innovators when it comes to this. There are lots of things that we can do and show the way. And then weve got to find ways in our country to take it to scale, which is very difficult. But you have to again, back to this federalism point, we have to have participation at the state, federal, and local level to make these things happen. And for us at least we want those wages to go up. Thats part of it. So a multipronged attack is the only way that thats going to happen to raise the education level, the type of Economic Development you have, the attractiveness of your city. It takes a while. Its difficult. And its got to be sustained over a long period of time. Mmhmm. If i could the mayor said something much earlier. And i do i know were running out of time. But i do really feel, you know, there are so many differences between 2008 and 2020 and you touched on it, he tuchtd on it. And we havent talked that much about it. But the civil unrest, the racial stri strife. Covid19 has forced out into the open in addition to the murders of george floyd, the murder of breonna taylor, the shooting of jacob blake and so many ahmaud arbery. I mean, so many names, so many people. And then you see that black and brown people, again, disproportionately, negatively affected by covid19. I mean, this has just brought so much light and exposed for everyone to really see if you want to see the challenges of black people, brown people, people of color in the United States of america. And that when all of this happens at the same time these issues are not going away. We dont know an end date for covid19. We dont know an end date for fiscal distress. And we definitely dont know when are americans going to decide finally that people are going to be treated equally, were not going to have these differences, were not going to be so glaring in the inequities. So theres so much work to be done. But when carolyn talks about trying to look at things from an equity lens, i think that is one of the driving components of what 2020s about. And i am just praying and hopeful that we dont lose sight of that as we make progress in some of these other areas. This is not a thing. Its not the moment. It is whats going on and whats happening in america. And we need to make sure that it remains front and center. I think thats very well put. And i think we started off talking about Small Businesses and pressures on the Service Industry and i think we shouldnt forget that the people that are employed in those businesses are often people of color, you know, immigrant families that are starting businesses. And for those kind of communities. Im hopeful the cities can reclaim that role and maybe do it better based on some of the funds were seeing that some innovative mayors are trying. And thats a whole other panel we could have some other time. I want to thank you all so much for being here. Were so privileged to have thought leaders of your caliber for this conversation. And id encourage everyone to continue to engage with us at urban institute and check out all the resources that we have about all these issues at state and local levels or federal level. Thank you so much for being with us. Take care. Thank you. Weeknights this month on American History tv, were featuring the contenders. Our series that looks at 14 president ial candidates who lost the election but had a lasting effect on u. S. Politics. Tonight author h. W. Branz on 19th century political figures henry clay, john c. Calhoun, and daniel webster. He explains why the three statesmen were critical to american politics between the war of 1812 and the compromise of 1850. Watch tonight beginning at 8 00 eastern. Enjoy American History tv. This week and every weekend on cspan3. Join us later this week for the Vice President ial debate. Kamala harris and mike pence are set to square off wednesday in salt lake city. Its due to start at 9 00 p. M. Eastern. And you can watch it live on cspan. Watch live coverage of the Senate Confirmation hearings for judge Amy Coney Barrett starting monday october 12th. With Opening Statements by Judiciary Committee members and judge barrett. Live coverage on cspan and cspan. Org. Listen live on the cspan radio app. And be sure to visit cspan. Org to view a playlist of Amy Coney Barretts legal views. Quli. In june of this year the house approved legislation requiring federal Uniformed Police officers to wear body cameras and to have dashboard cameras in marked vehicles. Due to technical issues the beginning of this hearing could not be shown. The Interiors Office of the Inspector General issued a scathing report about the