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Saint Paul, MN Mayor: ‘We’re going to be in a world of hurt’ without state and local aid in stimulus package

Mayor Melvin Carter of Saint Paul, MN joins Yahoo Finance's Kristin Myers to discuss his city's need for COVID-19 relief, as Congress agrees to a stimulus deal that lacks state and local aid.

Video Transcript

KRISTIN MYERS: And on terms of stimulus, after months of negotiating, Congress has finally struck a deal on that stimulus package. The bill comes in at about $900 billion-- much lower-- much lower, excuse me, than the more than $2 trillion that Democrats had originally wanted from their package. Now, this package is going to include individual stimulus checks-- that's going to be roughly $600.

That's going to be half of what folks received in the last aid package. Unemployment will also receive a boost to the tune of $300, also having the $600 that we had seen in the last package. Now, this package is also going to include aid for small businesses and funds for vaccine distribution.

But there's two big items that are not going to be in this aid package. One is aid for state and local governments that Democrats had been pushing for. Also missing from this bill are protections for companies from coronavirus-related lawsuits that Republicans had wanted. So I want to start on that point of a stimulus.

Many cities and states say that they needed the federal government to step in and provide assistance for them. So we're joined now by St. Paul, Minnesota Mayor Melvin Carter to chat more about this. Mayor, always good to have you with us. So we see state and local aid is not a part of this package.

We've heard mayor after mayor after mayor-- and even just last week Ohio's Lieutenant Governor Jon Husted saying that Congress really needs to step in and provide that aid to state and local governments. I'm wondering what your reaction is to this news that we do have a stimulus deal-- unfortunately, it's not coming with extra funds for states and for cities like St. Paul.

MELVIN CARTER: Look, thanks for having me on. It's always a pleasure. It's an enormous disappointment for us. This past spring when we passed the CARES Act, we heard all of our leaders in Washington, DC say that aid to cities in particular and kind of local governments would be a priority. That's important, because the way our government is structured, it's our local governments-- it's cities, it's counties across the country that are responsible for caring for people on an intimate, very localized level.

And so while I can celebrate support for businesses and support for families in the form of kind of stimulus payments and even unemployment, there's a number of things that we do, from providing basic police and fire and ambulance services, to just connecting with families during a pandemic, to trying to serve members of our community who are experiencing unsheltered homelessness that are falling between the cracks of that.

That's the work that we do. We're struggling on the local level to keep that work afloat as our cities across our country. And for us to have, again, no support from the federal government is massively disappointing.

KRISTIN MYERS: You know, well, you guys did receive extensions, however, on how long funds from the first act could be used. I know this was a pretty small victory that Democrats were able to squeeze in right before that negotiation was finalized. I'm wondering if there are still funds that Saint Paul, that Minnesota has access to from that first aid package-- and how long do you think it's going to last you guys in 2021?

MELVIN CARTER: Well, it's important to note that we're a city of about 315 in population-- 315,000 people. And so that first CARES Act directed funds directly to governments that were larger than 500,000. So in a city of 315,000, we have significant challenges related to the COVID pandemic. We had to cut this year's budget by about $20 million while cutting next year's budget by another $20 million.

So we've got significant challenges to deal with. We've got a population of people experiencing unsheltered homelessness that has literally tripled-- has literally increased by a factor of 10 in the past year. We did not receive those direct CARES Act. Our state appropriated those funds to us, but those funds had to be used by November 15.

So we were able to partner with our state, but we did not have access to the direct money that came from the federal government because of that 500,000 population threshold. We're still working with our state to try to, like I said, house people who are experiencing homelessness and provide some of those other kind of emergency kind of front line services. But many of the things that we're doing, once the new year rolls over, we're still going to be struggling to keep those things going.

KRISTIN MYERS: So to that point, I know you just mentioned that budget shortfall-- I believe you said it was $20 million. So then I hear what you're saying-- St. Paul is a city of under 500,000 residents, which, of course, means that you were not able to access some of those funds from the last package-- the CARES Act.

So really highlight for us the position that St. Paul is going to be in financially, not just in 2021-- but we know that these effects are going to be ongoing even beyond that. So as you're looking at it as the mayor of the city, what position are you guys going to be in next year or the year after that?

MELVIN CARTER: It's not just the position we're going to be in next year, it's the position we've been in since this summer. It's that we're in a state where our residents, our businesses are all in a state of crisis-- different types of crises, but all facing crisis and feeling incredibly vulnerable that they are relying more than ever on frontline city services as our librarians have spent time over the summer sewing masks, our parks and rec workers have participated in a large partnership that's distributed over a million meals now to residents and families in need.

Our police, and fire departments, and ambulances have had demands upon them greater than literally ever before. And we're struggling. We struggled to put together a budget this year that didn't raise property taxes, because now is not a time to hike our property taxes locally here, that didn't layoff our staff, because we didn't want to impact our frontline public safety, the staff that cares for children and families. And we were careful about not wanting to tap our emergency reserves, because there's so much uncertainty on the horizon over the next coming years.

So that just put us in the place where we have some really, really difficult choices to make. It had deep impacts-- like, for example, we won't be able to, unless something changes significantly for the better, we won't be able to have a police academy this year. So it's impacting public safety. It's impacting emergency response. It's impacting our libraries and our recreation centers that all of our children and families rely on. It's having an impact on every corner of our community.

KRISTIN MYERS: So two pieces that I want to pick on there and just ask you a little bit more about some of those cuts. I hear what you're saying-- that cuts, obviously, had to be made, but you guys were able to avoid layoffs right now. You started talking about some of those scale-backs that will be seen in the city. I'm wondering if you can highlight a little bit more some of the services that are going to be impacted in St. Paul because of those cuts that you guys had to make when it comes to the budget, because of the shortfalls.

I'm wondering if you can highlight some more there. I know you're mentioning that the police academy is not going to have a training class coming up. Are there other cuts that are going to be made when it comes to schooling aid that the city is able to provide for some of the vulnerable populations? I'm wondering if you could talk a little bit more about that.

MELVIN CARTER: Yep, absolutely. And again, it's not just that it's cuts. It's that right now, our community needs us more so than ever before. Our school district-- I don't run our school district, and so that doesn't come underneath kind of our specific budget. But I'll tell you-- we have literally reduced every single city department, except for our technology department, which we had to put a little boost in because everybody's doing our meetings through technology and virtually.

And so every single city service, every single city department, every single city employee is impacted by these cuts. Like I said, we have gone really deep to try to avoid mass layoffs and at solving these problems on the backs of our workers. But literally, the full spectrum of things that we do are impacted by this work-- are impacted by this crisis.

And again, in the meantime, this time last year, we were tracking about 29 people living outside in tents in our city. This, year it's been over 300. And so it's not just that we're making cuts-- we are-- but we're making cuts in a time where our communities across our country need good public services at the local level the most.

The folks who were serving who are living in tents-- by the way, it is freezing cold in Minnesota, and it drops to life threatening temperatures at night. Those individuals aren't getting stimulus checks. Those individuals aren't getting unemployment checks. Those individuals are not covered when we provide support for small businesses.

It's the local governments across our country who are responsible for connecting those individuals to some level of stability and resource. And to have the rug pulled out from under us in the form of just kicking the can down the road where support for cities and counties and states are concerned, again, it doesn't hurt me-- it's not that it hurts the mayor, it hurts the residents, it hurts our businesses, it hurts our students, and it hurts everybody and all of our community.

KRISTIN MYERS: You said that layoffs were not a part-- you guys were able to avoid layoffs going forward.

MELVIN CARTER: That's right.

KRISTIN MYERS: How long do you think you're going to be able to avoid layoffs, especially as this pandemic, frankly, right now, is only continuing to worsen. Doctors say that it's only going to get worse over the next couple of months. We don't know if state and local aid will be a part of a separate package that Congress passes. And it did take Congress a very long time just to get economic aid, you know, to just Americans right now.

And these are two of those really thorny issues that Congress was working on, one of them being state and local aid. So let's just say you guys don't ever get it-- do you think that you'll be able to avoid layoffs in 2021? Or do you think that they might be coming down the pike?

MELVIN CARTER: You know, there's so many variables still in front of us. And I think that's kind of the point. I don't know. We don't know what the shape of the economy is going to be. We don't know what the impact will be on sales tax and property tax and parking receipts over the course of the next year. We've sort of been managing the unknown unknowns throughout the course of the year.

And so, again, our commitment to our city staff is we're going to do everything that we can to avoid just massive layoffs. We're going to do everything that we can to maintain some level-- whatever level of public services that we can. There are so many just unknown unknowns for us. And again, that's why it was important for us to have to make the hard reductions that could keep us from having to just raid our emergency reserves right now, because there are so many unknowns out in front of us.

It's certainly unsustainable. But I'll tell you this-- the biggest stress for me isn't what happens inside city hall. The biggest stress for me is what happens in our communities, right? We're not even really having a big conversation yet about what happens with regard to housing when our eviction and foreclosure moratoriums expire. We're going to have to summon all of our courage in Washington, DC and pass what I think will have to be historic stimulus that's going to just raise the floor and support Americans in a way that we've never really had to before. I don't see any way around it. We need help from the federal government or else we're going to be in a world of hurt.

KRISTIN MYERS: All right. Mayor of St. Paul, Melvin Carter, thanks so much for joining us today.

MELVIN CARTER: Thanks for having me on.