Survey shows that California’s local governments need help now

California’s hospitals have been stretched to capacity, many workers are unemployed and their benefits are running out. Our local governments – often the first source for help in difficult times – are also struggling.

Local governments are on the front line when it comes to getting vaccines into arms, reopening schools, testing and contact tracing, maintaining public safety, and caring for the poor and homeless.

Together with UC Davis’ Center for Regional Change, our research group at the USC Price School of Public Policy and Occidental College surveyed local governments to understand the impact of COVID-19 on their fiscal condition. The results show that California’s local governments need help now. They face a dual crisis from the pandemic: increasing demand for services and reduced staffing and budgetary capacity to meet those demands. If local governments are to be the foundation of a strong recovery, they need support that goes beyond plugging budgetary holes and boosts their ability to perform their essential tasks.  

From October through December, we surveyed budget officers across 29 California counties in the Central Valley and San Francisco Bay Area, home to about 35% of the state’s population. Officials from 94 government agencies responded, representing 36 cities, 51 school districts and 7 counties or county transportation agencies. 

Budgets are strained. Twenty percent of local governments that answered the survey stated that they will not balance their budget this year, and another 20% might not. Sixty-seven percent of the respondents said their government has used or plans to use reserve funds to bridge budget gaps. Yet, reserves have not been enough: 61% of surveyed governments have reduced services or deferred capital expenditures or maintenance. One in 10 respondents have furloughed or laid off personnel. 

One city reported furloughing part-time workers and leaving open police department positions unfilled. Another city reduced post-employment benefits payments, deferred cost of living increases and instituted a hiring freeze. These and other cost-cutting moves are directly related to the pandemic and are not the result of spendthrift practices or mismanagement. The survey revealed no relationship between pre-pandemic fiscal condition and current budgetary pressures.

At the same time, local governments have had to increase some services to fight the pandemic. One school district replied that they had to hire additional staff to cope with COVID-19 health and safety requirements. Another school district purchased tablet computers for students forced into home-schooling but without the means to purchase or access a computer. These are among numerous examples of local governments spending more to provide key services to their constituents. Today, they have the vital but added burden of administering vaccines.

Our schools, cities and counties are facing a sudden loss of revenues coupled with a rapid increase in their responsibilities. However, state and federal COVID-19 assistance has not recognized their pivotal role. Washington, D.C., did not include any funds for state and local government assistance in the December renewal of stimulus funds. Gov. Gavin Newsom’s proposed economic recovery plan provides nothing for cities and counties, though it does propose $450 per pupil for school districts to reinstate in-person instruction. However, this does not help the school districts struggling to balance remote instruction, reopening and the health of students and staff alike. 

These omissions ignore a pressing need.

Precisely when schools need funds to teach remotely and safely reopen, counties need funds to streamline and speed up the delayed vaccine rollout, and cities need funds to protect first responders and fund public health initiatives, the state and federal government have given little help. Local governments have already tapped reserve funds, deferred expenses and reduced services. 

As new legislative sessions begin in Sacramento and Washington, the needs of our cities, counties and schools should be front and center. Without financial assistance from the state and federal governments, our localities face a prolonged deterioration of their budgets at precisely the moment when we need them the most.