Augusta City Manager William Bridgeo was clear Monday about the impact of the global coronavirus pandemic on cities and towns across Maine.
“I’ve been a city manager for just about 40 years now, and 22 here in Augusta,” Bridgeo said. “This is the most intense and biggest crisis that I and my municipal colleagues have dealt with in that entire period of time.”
Augusta City Manager William Bridgeo speaks in January during a City Council goal-setting meeting at the Augusta Civic Center. Joe Phelan/Kennebec Journal file Buy this Photo
Bridgeo made his comments during a conference call along with U.S. Sen. Angus King, I-Maine, and Gov. Janet Mills, organized by the American Federation of State County and Municipal Employees, urging action on the next phase of federal coronavirus stimulus funding.
Four months after the Democratic-led U.S. House of Representatives passed a $1 trillion aid bill, the U.S. Senate has so far failed to take action on it or gather enough support to pass its own stimulus proposal, which lacked aid for state and municipal governments that have tallied billions of dollars in revenue losses since the pandemic was declared in March.
“There’s still time for the Senate to reach an agreement with the House, and provide states and cities and towns with meaningful assistance,” Mark Bernard, executive director of AFSCME Council 93, said.
AFSCME represents 2,700 public sector workers in Maine.
“AFSCME is here today to not only highlight the dire consequences of failing to provide substantial, robust relief to states and municipalities,” Bernard said, “but also, respectfully, to urge Maine’s Republican Sen. (Susan) Collins to make a stronger effort to secure federal aid for Maine.”
While Collins has indicated support for such aid through both public statements and legislation, Bernard said his organization is asking her to exert strong public pressure on Senate Majority Leader Mitch McConnell, a Republican from Kentucky, to deliver the aid.
When Augusta officials realized last spring revenues would drop, Bridgeo said they had to take steps to ensure the municipality’s budget remained balanced, including laying off more than 10% of the city’s employees. Like state governments, municipalities cannot spend more than they take in.
“We’ve got about 240 full-time employees at any given time, and we eliminated 32 positions,” Bridgeo said. “In a small operation like ours, I personally felt the obligation to meet with every employee that was laid off and explained to that person why we had to do what we had to do. I can tell you, that’s an excruciating and painful process.”
Those cuts came to departments across city government, Bridgeo said, and the impact was felt immediately. He added the city was able to finish the fiscal year in good shape, with no property tax increase.
“We were able to make some assumptions when we adopted the budget for July 1 so that the budget was in balance,” Bridgeo said, “but if, for instance, the state has to find $600 million to $700 million in the middle of their current fiscal year and they have, as a result of that, to scale back the anticipated aid to municipalities, that would likely suggest a further reduction in our workforce and a deeper drawdown of our fund balance, the city’s emergency savings account and you would envision some scaling back of services.”
Municipalities have obligations they have to pay, such as debt service and contracts, and they have discretionary spending.
“If we don’t see some relief, and if the state has to reduce what they typically send to us, I would say it’s more pain for the local government and the local residents going forward,” Bridgeo said.
In the next 12 to 18 months, that could mean scaling back services and raising taxes, similar to what happened in the financial crisis from 2007 to 2009.
Augusta operates the Augusta Civic Center as an enterprise account, meaning it pays its obligations with the revenue it brings in. But because limits have been imposed on public gatherings, events have been canceled since March.
The Civic Center ended the last fiscal year in the red by about $300,000, Bridgeo said. But the end of the coming fiscal year, it will have incurred about $1.5 million in red ink, and that will have to be backfilled by the city’s fund balance, which is an added pressure to the city’s finances.
By some estimates, failure to pass any aid would result in the loss of 21,100 jobs in Maine in the private and public sectors.
Mills highlighted some good news for the state. Last week, the CNN Business and Moody’s Analytics’ Back to Normal Index ranked Maine first in the nation for economic recovery, noting the state’s economy is now operating at 93% of where it was in early March.
At the same time, the state’s Revenue Forecasting Committee has projected a $528 million shortfall — due to the COVID-19 pandemic — for the two-year budget term that ends June 30. As a result, Mills said, steps have been taken to curtail spending.
That shortfall could grow to $1.4 billion over the next three years.
“We did that without a layoff, but we know over the long run, our revenues just won’t be enough to make up the gap that the nonpartisan Revenue Forecasting Commission projected,” Mills said. “Without important additional federal aid, we’re going to face even more difficult choices in the months and years ahead.”
Maine has a so-called rainy day fund, but Mills said she is not going to dip into it.
“I am not going to drain the rainy fund because Congress doesn’t have the chutzpah to step up to the plate and do what’s necessary over the long term,” she said. “That’s a short-term solution to a long-term problem we’re facing right now.”
The impact of widespread closures of businesses and government offices across the state earlier this year was offset in part when the first round of federal assistance in March included aid for businesses, workers and state and local governments, including direct payments to people.
When Maine received funding through the bipartisan CARES Act, it came with limits on how it could be used. One of them, Mills said, is the requirement to spend it all by Dec. 31, while the budget year ends six months later.
The state is being hampered by that timeline, she said, and by the amount of aid, which is not enough to meet all needs.
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