With thousands of new coronavirus cases being reported daily in Texas, cities across the state are bracing for more drops in tax revenues. That revenue is needed, of course, to fund city services that include police, fire, education, libraries, street repairs, sanitation, parks and more.
Service cuts over tax hikes
The Texas Municipal League recently reported that despite steep declines in sales tax revenues, most cities plan to make temporary cuts to services rather than rather than hiking property taxes to replace the lost revenue.
Texas Municipal League Executive Director Bennett Sandlin said It’s not “a sure thing that most cities will go up in property taxes.” He said a lot of people are struggling to make their mortgage payments and that a property tax hike would make matters worse for those families.
He said some municipalities will likely slash parks and library budgets, while others are expected to lay off department employees.
Is federal aid coming?
Though Texas municipalities get no state aid, it is possible that another federal stimulus package will include relief funds for cities.
According to the federal Labor Department, the public sector (federal, state, county and city governments) have shed more than a million jobs since the pandemic’s onset.
Long-time Texas Congressman Kevin Brady recently said that state and city governments don’t need more federal aid, but that they do need permission to redirect the aid they’ve already received. “What I hear back home is that our states and cities don’t need more money,” Brady said. “They need the flexibility to be able to spend it where they need it.”
Cities facing police or firefighter union negotiations or other wage and benefits disputes normally deal with a wide range of complex issues. Negotiations in these uncertain times are likely to be even more difficult.