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Cities facing the biggest revenue losses due to COVID-19

  • Cities facing the biggest revenue losses due to COVID-19

    COVID-19 took the world by storm in 2020, and the virus brought with it financial hardships and an economic recession all over the United States. Cities across the country banded together to mandate stay-at-home orders and required the use of masks in an effort to flatten the curve and prevent the further spread of the virus. As a result, many small businesses took some of the biggest hits financially and were forced to close either temporarily or permanently. In addition, the country has seen an inconsistent wave of regulations that differ from city to city. The United States currently has a total of 6.2 million reported cases of the coronavirus so far, and over 185,000 have died from the virus.

    As a result of this economic tragedy, on March 27 the CARES Act was signed into law by President Trump in an effort to help provide aid and relief for Americans. However, it has become clear to business owners and residents nationwide that the majority of the country’s primary functions revolve around social interaction, and many are beginning to question if the act will be enough.

    Economic researchers Howard Chernick, David Copeland, and Andrew Reschovsky estimated the financial toll that COVID-19 will take on cities across America in their paper titled "The Fiscal Effects of the COVID-19 Pandemic on Cities: An Initial Assessment" and published in the September 2020 issue of the National Tax Journal. The researchers evaluated 150 fiscally standardized cities based on how much tax revenue they may lose in Fiscal Year 2021. Their results are reflected in two estimates of tax revenue loss, covering areas such as sales tax, personal income tax, and property tax: one estimate uses a less severe scenario (less revenue loss) while the other uses a more severe scenario (more revenue loss). In this story, Stacker ranked the top 100 cities with the highest revenue loss under the less severe scenario; ties are broken by revenue loss under the more severe scenario.

    Of the 100 cities on this list, 11 are in California, eight are in Florida, six are in Ohio, and five are in New York. Cities in New York state make up four of the top five cities with the largest projected revenue losses. Read on to find out COVID-19’s revenue impact in your city.

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  • #100. Baltimore

    - Projected FY 2021 revenue loss under less severe scenario: 4.6% (#97 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 7.3% (#115 highest)

    On average, Baltimore as of Sept. 10 was confirming 102 cases of COVID-19 daily. Maryland became the 19th state to hit 100,000 coronavirus cases on Aug. 16. Baltimore moved into Phase 2 of its reopening Sept. 8, which allows for indoor dining, casinos, and indoor retail to open at 50% capacity.

  • #99. Santa Ana, California

    - Projected FY 2021 revenue loss under less severe scenario: 4.6% (#97 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.1% (#95 highest)

    Neighborhoods in Santa Ana by mid-August represented some of the highest case counts of COVID-19 in Orange County. The city had already suffered $12 million in losses by May of this fiscal year, according to Finance Director Kathryn Downs. Santa Ana in late August implemented a Mobile Resource Center that provides free COVID-19 testing, masks, and assistance programs for those impacted by the virus.

  • #97. San Diego (tie)

    - Projected FY 2021 revenue loss under less severe scenario: 4.6% (#97 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.2% (#91 highest)

    Businesses are slowly beginning to open back up in San Diego, but the number of coronavirus cases does not seem to be dwindling. On Sept. 1, 67 new COVID-19 cases were recorded in the city; one new community outbreak that day was traced to a bar/restaurant.

  • #97. Fremont, California (tie)

    - Projected FY 2021 revenue loss under less severe scenario: 4.6% (#97 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.2% (#91 highest)

    Fremont, tied with San Diego in estimated revenue loss from COVID-19, has put forth aggressive initiatives to help relieve some losses to small businesses. The Small Business Relief Grant Program targets Fremont businesses that have been heavily impacted financially from the pandemic, utilizing Fremont’s diverse income tax base which helps employees in the case of emergencies like this.

  • #96. Frederick, Maryland

    - Projected FY 2021 revenue loss under less severe scenario: 4.7% (#94 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 7.4% (#114 highest)

    Coronavirus case numbers in Federick trended downward in August with a small rise in cases in early September. Frederick County Public School is conducting classes virtually throughout the fall semester.

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  • #95. Omaha, Nebraska

    - Projected FY 2021 revenue loss under less severe scenario: 4.7% (#94 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 7.8% (#106 highest)

    In an April survey, nearly 90% of business leaders in Nebraska reported being negatively affected by the COVID-19 crisis. In Omaha, the unemployment rate was 9.9% in April, which is 1.3% higher than the state’s normal unemployment rate as a whole. Half of the city’s general budget comes from sales tax, making the impact from closed businesses a hard hit.

  • #94. Los Angeles

    - Projected FY 2021 revenue loss under less severe scenario: 4.7% (#94 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.5% (#81 highest)

    Los Angeles has projected a heavy loss in finances, and officials fear for residents’ job security because the projection of case numbers seems uncertain. Since the tourism industry has withered away with the virus’ introduction, the city is looking at a revenue loss between $45 million and $400 million. A UCLA study published in the Sept. 10 issue of the Journal of Medical Internet Research found a spike in patients coming into UCLA Health hospitals and clinics in late December 2019 with coughs and acute respiratory failure. Those findings indicate COVID-19 was already being transmitted in Los Angeles months ahead of the first definitive COVID-19 cases in the U.S. being reported.

  • #93. Birmingham, Alabama

    - Projected FY 2021 revenue loss under less severe scenario: 4.8% (#90 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.0% (#100 highest)

    Due to the pandemic, Birmingham postponed its 2021 budget plan by three months. Its delayed release in late August included reductions that reflected a $63 million shortfall in business tax revenue.  About 71% of the jobs in Birmingham metro area in mid-March were consumption-based, meaning they required people to leave their homes and spend money, a practice which has been heavily impacted due to city locals staying at home.

  • #92. Fresno, California

    - Projected FY 2021 revenue loss under less severe scenario: 4.8% (#90 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.5% (#81 highest)

    More than 2.8 million Californians by mid-April had filed for unemployment benefits, with thousands of Fresno locals contribute to those numbers. The city surpassed 21,000 cases of COVID-19 in mid-August.

  • #91. Stockton, California

    - Projected FY 2021 revenue loss under less severe scenario: 4.8% (#90 highest of 150 cities examined)
    - Projected FY 2021 revenue loss under more severe scenario: 8.6% (#77 highest)

    Stockton officials have their own unemployment relief program for eligible residents. Stockton Economic Empowerment Demonstration (SEED) is a program begun in February 2019 that selects 125 residents to receive $500 a month for 18 months from the city. Stockton officials hope that other cities across the country can contribute to the program and extend the help to others.

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