Effects of Covid-19 Related Government Budget Shortfall on Funding and Provision of Essential Public Services

Abstract

This study investigates COVID-19 related budget revenue losses in US local governments, and their effects on funding and provision of essential public services such as EMS, healthcare, firefighters, police, welfare and public housing services. A survey was sent to county and city governments to learn about their revenue losses for fiscal year 2020 and their effects on funding and service provision. Results show budget revenue loss significantly impacts funding cuts for essential services and is most impactful on welfare and public housing services. Additionally, although funding cuts significantly influence levels of services provided, aid from federal government restrains the extent of funding cuts and the influence of cuts on EMS and healthcare. The findings imply intergovernmental transfers play a pivotal role in averting deep cuts that could be detrimental to saving lives during a crisis. Furthermore, funding availability is key to maintaining appropriate levels of services to help care for the sick and protect the vulnerable in society.