COVID-19
Fiscal Impact on California Cities
California cities face severe revenue shortfalls due to the impact of the COVID-19 pandemic on
their economies and increased emergency costs. As a result, cities will be forced to make significant
reductions or cuts to a broad range of core public services and staff, regardless of population
size. Given current and projected revenue shortfalls, cities need fiscal assistance to stabilize
local government operations to offset the devastating impacts the crisis is having on California’s
communities. These findings are part of a new data analysis* by the League of California Cities.

Public Services Will Be Impacted By Drastic Revenue Loss
Of Cities

Of Cities

Of Cities

Of Cities

Of Cities

< 25,000

25K-49,999

50K-99,999

100K-249,999

250K +

84%

90%

85%

79%

80%

Cut or decrease to public services

No cut or decrease to public services

Core Services Face Significant Impacts Regardless of City Size
Percentage of cities by population
90%
87%
82%
79%

78%

84%

90% 90%

87%

80% 80%

71%
57%

53%

50%
30%
21%
11%

< 25,000

16%

18%

25K-49,999

50K-99,999

Emergency Medical Services

30% 30%

32%

30%

30%

19%

53% 55%

49%

11%

Sanitation/Waste

Fire Services

250K +

100K-249,999

Homeless Services

Police/Public Safety

Planning/Housing

Cities anticipate a nearly $7 BILLION GENERAL REVENUE SHORTFALL
over the next two fiscal years. This shortfall will grow by billions of dollars if
COVID-19 stay-at-home orders extend into the summer months and beyond.

City Leaders Report Immediate
Impact to Core Revenue Sources

100%
89%
72%
42%
15%
4%

COVID-19 Has Staggering
Impact on City Workforce
Of Cities

Sales Taxes
Hotel/Bed Taxes
Property Transfer Taxes

< 25,000

25K-49,999

50K-99,999

71%

82%

77%

Utility Taxes

Of Cities

Investments,
Forfeitures, and Fines
Parking and Admissions

250K +

63%

60%

Anticipate furloughs or layoffs
Do not anticipate furloughs or layoffs

to help control the COVID-19 pandemic

93% Disinfection of public facilities

Of Cities

100K-249,999

12% of cities report spending > $500k
Unanticipated COVID-19 Expenses

Of Cities

Of Cities

Over

are considering LAYOFFS
90% ofORcities
EMPLOYEE FURLOUGHS, or

72%

CUTTING PUBLIC SERVICES.
are considering doing BOTH.

91% Purchase of personal protective equipment
85% New technology for remote operations

$24 million

operations
67% Emergency
center/training costs

Utility Taxes

$65 million

public safety costs
61% Increased
(includes overtime)

Franchises

personnel costs
56% Increased
(includes overtime)
Purchase supplies

*Percentage of cities

$93 million

Parking and Admissions

$402 million

$616 million

$1.37 billion

$2.26 billion

$1.7 billion

County
Transportation SUT
Sales Taxes

of California cities, regardless of
population size, face projected revenue loss this year

$28 million

Property Transfer Taxes

$175 million

Investments,
Forfeitures, and Fines

32% for residents

support to
32% Financial
residents/businesses

Cities Key Revenue Loss by
Source through FY 21-22

Business Tax

Hotel/Bed Taxes

City/County of
San Francisco

Total $6.7 billion

For more information email communications@cacities.org.

*Data and Assumptions: The current revenue shortfall projections assume the ending of strict stay-at-home orders by the end of May 2020 with a transition to
normalcy and a gradual return to taxable activities. The revenue shortfall projections include FY 2021-22, as there will be delayed revenue impacts from multiple
sources, including business license taxes (based on prior year receipts). If strict stay-at-home orders remain in place through the summer of 2020, there will
be additional significant revenue losses – adding billions to overall city shortfalls. Over 260 cities, encompassing all of California’s diverse geographies and city
sizes, participated in the League’s COVID-19 Fiscal Impact Survey. The survey requested primary source data on projected revenue losses in key, general revenue
categories, and local impacts to city services and operations. The survey data reinforces projections produced from an in depth financial model built from annual
reports by the State Controller and the California Department of Tax and Fee Administration, survey data, granular analysis by government revenue specialists,
industry specific outlooks, and forecasts from respected economists.