The Recession Is About to Slam Cities. Not Just the Blue-State Ones.

Thanks to a 2018 court ruling, states can now collect sales taxes on purchases through Amazon or other online retailers, regardless of whether those retailers have a physical presence locally. That’s a silver lining.

“Without the Supreme Court’s intervention, in the last three years this would have been a whole different ballgame for us,” Mr. Suthers said.

Orlando, Fla., is projected to suffer about as much as Colorado Springs in these estimates. But with the county responsible for many services, the Orlando municipal government will be spared the worst of the pain. Orlando City Hall’s revenues rely heavily on property taxes, which were already set to grow next year. And, like Colorado Springs, the Orlando area has long benefited from population growth and a construction boom — the other side of broad demographic shifts toward the Sun Belt that have left Northeastern cities like Rochester more vulnerable.

“Maybe Orlando isn’t in the same dire situation as other places,” said Chris McCullion, the city’s chief financial officer. But he, too, is calling for direct federal aid, as is Mr. Suthers, a Republican mayor. “This is really, really important for the long-term health of cities and states,” Mr. McCullion said.

At risk is not just services for local residents in any given city, but the possibility that disparities will widen between cities that can weather this crisis and those that can’t, if they are largely left on their own.

“One legacy of the Great Recession was exposing and increasing inequities between communities,” said Amanda Kass, the associate director of the Government Finance Research Center at the University of Illinois at Chicago. Now those disparities could grow even wider.

Article source: https://www.nytimes.com/2020/08/17/upshot/pandemic-recession-cities-fiscal-shortfall.html