The federal government’s cut off for cities with populations of 500,000 people to directly receive federal stimulus money through the CARES Act is unfairly hampering Oakland’s ability to survive during the pandemic, Mayor Libby Schaaf said last week.
With a population of roughly 440,000, Oakland just misses the mark. In fact, the minimum population requirement adversely affects almost every city in the Bay Area. Only San Francisco and San Jose is large enough to qualify for the direct payments.
“That has been a real frustration,” Schaaf said during a conference call on last Wednesday hosted by Assemblymember Rob Bonta, and including the mayors of Alameda and San leandro.
Sacramento with a population of nearly 510,000, received additional federal funding that would nearly erase Oakland’s projected $80 million budget shortfall, Schaaf said.
“This economic interruption is impacting our revenues hugely,” she added. Unlike the federal government, which can run budget deficits year after year, if needed, local governments are required by law to approve balanced budgets every fiscal year. Amid potential massive reductions in local revenues, Schaaf said, “The federal government is the only entity that can bail us out.”
Schaaf registered annoyance with the federal government’s Small Business Administration loan program and the city’s over-present digital divide. “I hardly know a single business that was able to get one of the SBA loans during the first round,” Schaaf said.
While the city and local philanthropy during the covid-19 crisis has ameliorated the lack of internet connectivity and computers for many students in Oakland, the issue remains dire. About 17,000 students in Oakland have no WiFi or computer equipment, Schaaf said, and another 8,000 are “underconnected.”
Wednesday’s telephone town hall became an impromptu forum for the three East Bay mayors to lobby Bonta to push the state to provide further relief to cities.
San Leandro Mayor Pauline Russo Cutter said she expects budget cuts for the coming fiscal year. “It’s going to be a conversation we will all have,” she said. Cutter asked Bonta to lobby in support of a rate freeze on California Public Employees’ Retirement System (CalPERS) payments. “There’s no way, on top of the other deficits, that we could sustain a rate change,” she said.
In Alameda, Mayor Marilyn Ezzy Ashcraft fears many local businesses may not be able to make it through the pandemic. She reiterated Schaaf’s concerns about the inability for local businesses to merely apply for federal relief loans. “There’s a high level of frustration about not being able to access these loans. Some have not even been able to get into the system” Ashcraft said.
Like San Leandro, Alameda has a healthy amount of general fund reserves to work with, at least, in the early stages of the recession. Alameda has more than $30 million socked away, while San Leandro has more than $40 million. “But that’s not sustainable over time,” Ashcraft said. “I have grave concerns for our city’s budget going forward.”
Bonta also received a lobbying pitch from Ashcraft on the need for the state to pass a $7 billion stabilization fund for local cities. The plans have been pushed by among others, the League of California Cities, and is proposed to cover the next two fiscal years.
“We haven’t seen the last of the stimulus packages from the federal government,” Bonta told the mayors. “There’s hope that we can fill that gap at the federal level.” The House of Representatives last week is seeking $3 trillion in additional relief that would include $1 trillion for states and cities. Bonta added that the state is looking to offer block grants for local cities.