Six Issues Facing Local Governments in 2021
When we wrote our "Five Issues Facing Local Governments in 2020" we couldn't have imagined the year we'd confront.
The COVID-19 pandemic revealed both the strengths and weaknesses of local governments. We saw governments vote on new statutes on a Monday and implement them the next day to help restaurants operate as safely as possible outdoors. We saw creativity, speed, openness to new things, and unwavering dedication.
The issues we identified for 2020: Housing and homelessness, cannabis regulation, accessibility, the impact of the gig economy, and economic development will all continue to be important in 2021, however the impact of the pandemic has reshaped nearly every aspect of society. COVID accelerated many of the trends we'd been seeing in local government for a while, including the move to digital services and a focus on accessibility. These trends will definitely continue picking up speed in 2021 and help local governments work through the challenges they'll face.
Here are the key issues local governments will confront in 2021:
- Pandemic recovery and associated economic impacts: Most communities are facing the loss of local businesses, high unemployment, and the potential for evictions and continued economic disruption in tourism, restaurants, hospitality, and performing arts. Many who have been working from home may continue to do so full or part time, impacting large and small downtowns, commercial real estate, and government operations. Ensuring that zoning and permitting happens efficiently (our core mission at CityGrows) will help to keep construction jobs functioning smoothly and creating needed local income. The new stimulus funds should help keep some businesses afloat, but many will not make it through.
- Loss of revenue, budget cuts, and staffing changes: While some governments have already instituted significant staff cuts, most will not feel the full impact of pandemic budgets until the 21/22 budget year and beyond. While home prices have remained stable or risen in some places, experts estimate local governments will face between a 5 and 40% decline in revenue based on reliance on tourism and sales taxes. Governments are offering retirement packages and instituting hiring freezes and furloughs in the hope of avoiding layoffs. Many staff close to retirement are choosing to leave rather than face belt-tightening (especially because unlike the 2008 recession their 401Ks are doing well). While this may create opportunities for fresh ideas and new leadership, it will also create stress and the loss of institutional knowledge. Tools like CityGrows that help teams to do more with less are going to be even more important going forward.
- (Semi-)Permanent changes in many sectors of the economy: Restaurants, bars, and live music venues in most locations probably won't be operating the way they did in 2019 for at least another year. Governments will continue to navigate the balance between supporting local businesses and keeping employees and customers safe. Digital workflows to support safe operating processes and vaccine signups will help.
- Demands for equity and police reform: While some governments are instituting significant reforms in their public safety and police budgets and operating procedures, others haven't yet responded to the Black Lives Matter protests. The summer's events may have been the largest-ever protest movement in U.S. history. Issues of race and policing are not the same in different regions and sizes of government, but the pressure for equal treatment for all community members is unlikely to recede, and will continue to impact local governments.
- Expansion of voting: The 2020 election saw the highest voter turnout rates in more than a century, and the largest number of individual votes ever cast in the U.S. Many believe that the combination of a polarizing candidate and the COVID-related expansion of vote by mail and early voting resulted in record political participation. If local governments maintain expanded election participation opportunities, high turnout could be here to stay with implications for local elections and representation.
- New appreciation for the importance of government: Because of the pandemic we've seen increased understanding of the importance of local and national government. Whether it's first responders, epidemiologists, or local government administrators, our communities learned they could rely on state and local organizations to communicate with them and support them through challenging times. Whether it was through locally focused grant programs, regular press briefings, COVID testing programs or (soon!) vaccination programs, people have a renewed appreciation for the impact of local government. While some protested public-health protecting closure requirements and mask mandates, the vast majority of the country understood that local government leaders were doing their best to protect their communities in a situation with limited information. We think the renewed understanding of the importance of local government institutions will help with the recruiting and retention of team members and more appreciation of the dedication and commitment of the people who keep our communities moving forward.
What additional issues is your community facing?