US ECONOMY Washington to provide trillions to America’s towns and cities By Tony Favro, City Mayors Fellow  ON THIS PAGE: Biggest deal since the 1930s New Deal | Washington to provide trillions | Reforms | Conclusion ON OTHER PAGES: US cities recover from Covid pandemic | US mayors and mass media | US mayors | WORLD MAYOR 2023: The 2023 World Mayor Prize is dedicated to Friendship between Cities. The Honours will be awarded to mayors and cities that have made outstanding contributions to friendship, partnership and cooperation between towns and cities at home and across borders. PLEASE ELECT YOUR CANDIDATES American communities to benefit from biggest support package since Roosevelt’s New Deal February 2023: The US federal government has dramatically increased financial assistance to local government in response to events that, while national and international in nature, can cause real economic hardship, environmental damage and social uncertainty in towns and cities across the country. A number of Acts, passed by Congress and signed by President Biden, are designed to provide trillions of dollars for America’s local communities. The funding presents a once-in-a-century chance for US mayors to transform their cities - if mayors can seize the opportunity. Generally, mayors and cities have been cautious. Slightly more than 60 percent of the funds available to local governments have been committed. Of the committed funds, about half went to stabilizing government operations, including municipal fiscal health recovery from the pandemic, employee wages, and investment in facilities and equipment. Cities apparently find it easier to support existing programs rather than create new ones. Nan Whaley, former mayor of Dayton, Ohio and former US Conference of Mayors president, explained her city’s caution by saying, "We want to make sure that money is transformational" (11). Trillions of dollars from the US government The American Rescue Plan Act provides $1.9 trillion to stabilize government operations and address the Covid pandemic’s health and economic effects, particularly on families with children, renters and homeowners, and small and large businesses. Most cities received allocations that equal 25 to 50 percent of their annual budgets. These allocations must be obligated by 2024 and spent by 2026. The Infrastructure Investment and Jobs Act provides $1.2 trillion over ten years to modernize roads, bridges, transit, rail, ports, airports, broadband, and drinking water and wastewater infrastructure. President Biden chose former Mayor of New Orleans, Mitch Landrieu, and former Mayor of South Bend, Indiana and US Secretary of Transportation, Peter Buttigieg, to oversee implementation of the new bill. At least 40 percent of federal investments must go to “disadvantaged communities”, which the federal government defines as census tracts with persistent poverty, environmental justice concerns, or other historical disadvantages. The Inflation Reduction Act - which Bloomberg News calls a climate bill by another name - is the most aggressive action on tackling the climate crisis in American history (1). It will provide at least $1.3 trillion to reduce the federal deficit, reduce health care costs, increase domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030. Local governments will likely receive most of their funding through competitive grants. The CHIPS and Science Act provides $280 billion over 10 years to bolster US semiconductor capacity and catalyze research and development in semiconductors and clean energy. Billions of dollars will be invested in regional innovation and technology hubs across the country, bringing together city and state governments, universities, labor unions, businesses, and community-based organizations to create regional partnerships. The bill also allocates funds to local public schools for science, technology, engineering, and mathematics (STEM) education. In most cases, these funds supplement, and do not supplant, ongoing federal funding streams to local governments. As a result of these acts, federal spending with a direct impact on local governments will reach heights never before seen in the US. Perhaps the closest comparison is the New Deal of the 1930s, which was designed to pull America from a steep economic depression. A key element of the New Deal was a public works initiative which created three million jobs for Americans building and maintaining infrastructure. Infrastructure spending during the New Deal amounted to 1.3 percent of the gross domestic product; federal infrastructure spending from the recently-passed legislation may exceed 2 percent of gross domestic product and create millions of jobs to implement projects in communities across the country (2). The most salient comparison between the New Deal legislation and current legislation may be that both were designed to be worker-based and place-based. The legislation recently passed by Congress and signed into law by the President focuses on increasing the skills, productivity, and income of workers. This is a change from previous spending that focused on creating jobs. The recent legislation also calls for using local cultures as a basis for the planning, development, and evaluation of initiatives—such as highlighting local architecture and promoting local identities—thus moving away from the more generic performance-based criteria of past federal assistance programs. Congress passed most of the new federal legislation with bipartisan Democrat and Republican support. The magnitude of the spending acknowledges long overdue problems that the federal government believes must be addressed. The challenge for mayors is to use these funds to get their cities where they will need to be in the future. Public surveys indicate that the majority of Americans support local action on social equity, police reform, and climate change. Recent national opinion polls also identify the types of policy changes Americans feel are necessary to address these challenges. Since public safety, infrastructure, and public welfare are among the largest expenditures in all American cities, the public clarity may help mayors decide if and how to steer their cities in a different direction. Social equity A public opinion poll by Harvard University’s Kennedy School of government found that 96 percent of Americans believe that “Americans have a responsibility to respect the rights of others,” and 95 percent believe “it is the responsibility of government to protect the lives, livelihoods and rights of all Americans.” The survey also gauged support for about 30 key policy issues. Large majorities of Americans favored more government support for public education, affordable housing, and fair employment, as well as stronger government action to prevent discrimination based on race, gender, age, and sexual orientation, among other policy reforms (3). Another poll finds that 92 percent of Americans support racial equity in the workplace. Across all demographics, Americans agree that wages are key to achieving racial equity, with 77 percent saying that equity cannot be achieved without all workers, private and public sector, being paid a living wage. When looking at a range of specific policies that employers can implement, including pay equity analyses, demographic disclosure, and training opportunities, three-quarters or more of Americans say every policy is important for advancing racial equity. Wages comprise one of the largest expenditures of both governments and businesses, and Americans link employee equity with business success. A strong majority of survey respondents agree that the implementation of various racial equity policies, including higher wages and equal opportunities for advancement, would have a net positive impact on an organization’s long-term financial success (4). Both surveys found that support for advancing social equity was substantially higher than in similar polls conducted the previous year. Police reform Public safety is the largest expenditure of many American city governments. After the police killing of George Floyd and the subsequent civil unrest, the majority of Americans supported reforms to local policing. Recent polls suggest that this support has increased in the past year. The Harvard study found that 94 percent of Americans agree that “police should be accountable for violent or unlawful behavior;” 89 percent agree that “complaints about police misconduct should be submitted to an independent review board;” 85 percent agree that “police departments should implement transparent guidelines on when and how to use force;” and 78 percent agree that “Americans should have a right to sue police officers for violations of their civil rights.” (5) A Gallup poll finds that 50 percent of Americans support "major changes" to policing in the US, and another 39 percent favor "minor changes." Widely supported police reforms include requiring officers to have good relations with the community; changing management practice so officers with multiple incidents of abuse of power are not allowed to serve; changing management practice so officer abuses are punished; promoting community-based alternatives such as violence intervention; ending stop-and-frisk; and changing legal practices so that police officers face legal action for abuse of power or unnecessary harm (6). Environmental action According to a survey by the Pew Research Center, 63 percent of Americans say they see the effects of climate change in their own communities and 65 percent say that the federal government falls short in its efforts to reduce the impacts of climate change. Strong majorities say the US should be developing alternative sources of energy, such as wind and solar, and that government regulations will be necessary to encourage businesses and individuals to rely more on renewable energy. There is also widespread public support for extensive tree planting; tax credits for businesses to develop carbon capture and storage capacity; tougher restrictions on power plant carbon emissions; taxing corporations based on their carbon emissions; and adopting tougher fuel efficiency standards for cars and trucks (7). A Yale University survey finds that 72 percent of Americans believe global warming is happening and 59 percent believe it currently affects the US adversely. Fifty-nine percent of Americans want their local governments to do more to counter the impacts of global warming, and 65 percent say citizens should do more. More than seven out of ten Americans support carbon taxes and minimum renewable energy requirements; they also want schools to teach more about global warming (8). The American public appears to have strong opinions about the major areas that cities spend most of their money on, especially economic and social disparities and infrastructure. How are mayors responding? The US Department of the Treasury recently released data on how cities were spending their funds from the American Rescue Plan Act. These are the first large-scale funds provided to local governments by the federal government, and cities have considerable flexibility in how to use these monies (9). The National League of Cities, Brookings Institution, and the National Association of Counties issued joint analyses of the Treasury Department’s data. The analyses presented three major findings: “Most places have been slow to spend or even commit their funding; given the stakes and the time to spend, this is generally a good thing. “With some notable exceptions, few places are pursuing transformational investment programs; most are simply pushing money out the door. “While little meaningful cooperation exists across entities in allocating federal resources, several exciting examples exist that might be replicated” (10). Conclusion The data on American cities’ spending patterns for the billions of dollars they received from the American Rescue Plan Act may be a clue to how cities will utilize other massive new funding streams, and the data may be interpreted in different ways. On the one hand, a go-slow-and-do-it-right approach could be beneficial. Many cities have established task forces to identify goals, engage stakeholders, and align funders in order to shape meaningful, long-term investment strategies. On the other hand, far too many cities appear to lack a sense of political urgency and organizational capacity. The National League of Cities and US Conference of Mayors are attempting to address this issue by offering technical assistance to help large and small cities successfully obtain federal support (12). Opportunity is knocking at the door of American cities. Mesa, Arizona, Mayor John Giles calls it “an opportunity to change the paradigm” (13). But transformational change will not be automatic. It will take strategic and decisive leadership by mayors to advance and commit to larger visions and point the way for others. “This is just the beginning,” said Mayor Tishaura O. Jones of St. Louis, Missouri in anticipation of hundreds of millions of federal dollars her city is expected to receive. “I will work to make sure those investments benefit our entire city” (14). Endnotes 1) Eric Roston and Brian Eckhouse, The Inflation Reduction Act Is a Climate Bill. Just Don’t Call It One., Bloomberg, August 15, 2022. 2) Joseph Kane, Seizing the U.S. Infrastructure Opportunity: Investing in Current and Future Workers, Brookings Metro, December 2022. 3) Harvard University Kennedy School of Government Carr Center for Human Rights Policy, 2021 National Poll on Reimagining Rights and Responsibilities in the U.S., May 2021 4) Jennifer Tonti, Americans Agree That Advancing Racial Equity Starts with Paying a Fair Wage, JUST Capital, 30 May 2022. 5) Harvard University. 6) Justin McCarthy, Americans Remain Steadfast on Policing Reform Needs in 2022, Gallup, 27 May 2022. 7) Alec Tyson and Brian Kennedy, Two-Thirds of Americans Think Government Should Do More on Climate, Pew Research Center, 23 June 2020. 8) Jennifer Marlon, et. al., Yale Climate Opinion Maps 2021, Yale Program on Climate Change Communication, 23 February 2022. 9) US Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds, (accessed 2 January 2023). 10) Brad Whitehead, et. al., The American Rescue Plan: Opportunity is Knocking for Local Governments. Will They Answer? Brookings, 30 November 2021. 11) Joseph Parilla, et. al., Local Governments Ramped Up American Rescue Plan Commitments and Expenditures in 2022, National League of Cities, Brookings Metro, National Association of Counties, 16 December 2022. 12) Melissa Quinn, After Pushing for Billions in Relief, Mayors Take Time Spending COVID Aid, CBS News, 1 November 2021. 13) Carl Smith, City Finances are Stronger, but Uncertainty Lies Ahead, Governing Magazine, 17 October 2022. 14) US Conference of Mayors, National League of Cities, et. al., Empowering Local Leaders to Access Federal Infrastructure Dollars—And Drive Their Communities Forward (accessed 2 January 2023). 15) Quinn. 16) City of St. Louis News Release, Mayor Tishaura O. Jones Enacts $135 Million in American Rescue Plan Act Funding, Delivers Aid to St. Louis Families, 16 August 2021. © Copyright: All content of the City Mayors and World Mayor websites are protected by worldwide copyright. 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