ITHACA, N.Y. — City of Ithaca employees learned in an all-staff email Thursday morning that layoffs would be coming after the most recent federal stimulus bill failed to include funding for municipalities.
Ithaca’s and Tompkins County’s economy is heavily reliant on students and their families, as well as tourism, to generate the local sales tax that, along with property taxes, funds annual budgets. Those revenue streams are expected to dry up, and the city expects to take a serious financial hit from the COVID-19 shutdown, but it’s not yet clear how hard that hit will be.
Earlier this week, Mayor Svante Myrick met with department heads and senior staff to determine the best course of action given the projections of serious revenue shortfalls potentially stretching into next year.
The city, with a payroll of about $560,000 per week, has had its doors closed to the public since March 16. About half of the city’s 500 employees have been able to work from home. About 140 cannot do some or all of their work remotely. The city has continued paying employees during the shutdown, but that looks like it is set to change Friday.
“We are facing losses of revenue and increases in expenses that could amount to at least $4 million for the remainder of 2020, and could be as high as $13 million,” said Mayor Svante Myrick in an email to all city employees Thursday morning. “This represents anywhere from 6% to 21% of our budget. Because wages and employee benefits represent the vast majority of the money we spend, it is impossible to close the gap unless we reduce these expenses.”
The depth of the cuts depends on the department’s size and function. For example, the Youth Bureau and Greater Ithaca Activities Center could essentially be shut down, facing between 80 and 90% staffing reductions — where the Ithaca Police Department, Ithaca Fire Department and Department of Public Works are looking at 30% reductions, according to one source at city hall.
“We’re trying to put ourselves on target to save at least $4 million this year. This is one of the steps. The first step; we froze hiring and assessed all the capital projects and I took a 10% pay cut,” Myrick told the Voice in an interview Thursday.
“This is one more big step, but there could be others on the way,” warned Myrick. “If federal aid doesn’t’ come through we could even have to cut more deeply.”
While the future remains uncertain for local leadership, the layoffs are intended to be temporary. Employees will retain their health insurance and accrued time off will remain intact for when an employee returns, beyond that, the details will need to be negotiated across the city’s various bargaining units. The city is also considering retirement incentives for employees that may be approaching eligibility, which could allow other employees to return.
As to what he plans to do proactively to address the potential budget gap, Myrick says he plans to continue pressing state and federal representatives for help.
“I’ve tried screaming from the rooftop, calling our federal representatives on a weekly and sometimes daily basis, telling them how badly they are failing our communities,” said Myrick. “Our revenue disappeared but the demand for our services hasn’t. It will be impossible to rebuild our local economy without the backbone of the local government to support it.”
More specifically, Myrick is calling for Rep. Tom Reed, who served as mayor of the City of Corning before being elected to Congress, to stand up to his party and advocate for the aid Myrick says he must know municipalities desperately need.
“It is his party that is blocking funding for states and municipalities. We need him to talk sense to leaders of the Republican party, including the president,” added Myrick. “I’m furious that we are being left out. There is no reason for it. We are in the same boat that everybody else is — those cruise liners and those airlines that the feds are paying to keep employed — our workers are just as essential.”
For their part, Rep. Tom Reed’s office says they are working hard to make sure that whatever federal aid comes, and they do say that it is coming, actually makes it to municipalities.
“Knowing the reality of the situation, I’ve worked tirelessly behind the scenes to collaborate across party lines and get local aid in the best position for the upcoming phase four package. That’s why I applauded Minority Leader Schumer and Speaker Pelosi for agreeing to a revised aid formula in these phase four negotiations that will truly benefit all of our local governments rather than just a few,” said Congressman Reed through a spokesperson Thursday afternoon.
The congressman is concerned that — similar to the way New York used the increased Medicaid funding in the phase one stimulus to close budget shortfalls in its sprawling Medicaid framework, that municipalities could end up with no additional help, but rather federal funding switched out for state funding they would have received anyway.
“Now, we must ensure states will not engage in the kind of ‘bait and switch tactics’ that governors typically employ to reduce state aid to local governments in an amount equal to the direct federal assistance,” Reed’s statement continues. “I was glad to see President Trump voiced his support for direct local aid because I care about the policemen, firefighters, and municipal workers who are vital to our communities, especially in this time of crisis. It is clear we have some work to do in the Senate but I truly believe there is a path to get this to the President’s desk.”
President Donald Trump did tweet his support earlier this week for a phase four stimulus that includes funding for counties and municipalities, but no additional details have been put forth by the White House.
Reed’s office could not offer any further clarity on exactly when the phase four bill could be expected.