Legislative leaders and public sector union officials Tuesday called for financial help for state and local governments facing revenue shortfalls brought on by the pandemic-damaged economy.

Portland City Manager Jon Jennings said federal relief to cities so far has been limited to those with populations over 500,000, but looming revenue shortfalls threaten jobs and services in municipalities of all sizes.

Portland City Manager Jon Jennings Derek Davis/Staff Photographer

“We need direct federal support that is unrestricted,” Jennings said during a phone press conference with the American Federation of State County and Municipal Employees, which represents many public sector employees in Maine.

He said with just two months left in the city’s fiscal year it has collected only $174.5 million of $205 million – 85 percent – of the general fund revenue it had anticipated. By this time last year, Portland had collected 99 percent of its projected revenue, Jennings said.

With tens of thousands of Mainers unemployed and income and sales tax revenue in sharp decline, officials see budget shortfalls looming across all sectors of government.

State government alone could be short more than $1 billion – about half its budgeted spending – next year. That means funds that typically flow from the state to county and municipal governments will be in shorter supply.

Because of reduced commerce and travel, the state’s highway fund is also off by $125 million and the portion that’s shared with municipalities for road work will also be down.

“Unless these revenue shortfalls are addressed it will lead to furloughing, it will lead to all of the things that we know we really cannot sustain in terms of our workforce,” Jennings said.

Last week alone governments at all levels across the nation shed more than one million public sector jobs – more than the total lost during the Great Recession of 2009, said Lee Saunders, national president of AFSMCE.

“We cannot defeat this pandemic if our front line workers are faced with a pink slip,” Saunders said. He said those workers include public health nurses, paramedics, firefighters, teachers, sanitation workers, water treatment technicians, prison guards and dozens of other critical jobs.

Maine Senate President Troy Jackson, D-Allagash, and Speaker of the House Sara Gideon, D-Freeport, also joined Jennings, Saunders and other union officials on the call with state and national news media. They said Congress needs to send more aid to states but also to smaller cities like Portland.

“What we all understand right now is what we truly need is a comprehensive and cohesive federal action on a number of levels to protect the economic health of Americans,” Gideon said.

About 70,000 people work in local, county or state government jobs in Maine, according to the U.S. Department of Labor. The annual payroll for those jobs is more than $270 million.

Maine’s next monthly revenue report is expected to show dramatic revenue losses in April because of the pandemic-induced slowdown. The report will guide the governor and state lawmakers as they manage the state’s budget.

Members of Maine’s congressional delegation have advocated for increased and sustained support for local governments as well, while also urging flexibility in the use of federal pandemic aid already sent to states.

A recent analysis by the Center on Budget Policy and Priorities, a non-partisan Washington-D.C. based think tank on state and federal budget policy, shows state revenue shortfalls could total $650 billion nationally over the next three years, with the deepest shortfall of $350 billion coming in 2021. That’s more than $120 billion more than the shortfall from the Great Recession in 2010.

 

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