Local (and state) governments face massive budget shortfalls as a result of the Covd-19 Depression

Local governments--cities and counties--rely on two major sources of revenue, property taxes and sales taxes. See the 2016 blog entry, "The real lesson from Flint Michigan is about municipal finance."

The basic problem is that the system of finance for local governments was created during a period of rapid growth in the United States. It doesn't work well when growth stops, businesses close, etc.

These problems are only accentuated by the drumbeat of tax reductions, and limits on how much communities and states can build "rainy day funds" to be drawn on in times of crisis and penury.

Local governments are required to run balanced budgets. With most retail and hospitality outlets closed as a result of public health orders aimed at "flattening the curve" of the coronavirus, local tax revenues are down severely and are likely to be for much of the rest of the year.

This is already leading to furloughs and RIFs in some communities (e.g., "Coronavirus leads to staff reduction in one of Utah's biggest cities," Salt Lake Tribune).

The Washington Post ("More than 2,100 U.S. cities brace for budget shortfalls due to coronavirus, survey finds, with many planning cuts and layoffs") and Wall Street Journal ("Coronavirus Hits State and City Budgets" and "Smaller Cities Cry Foul on Coronavirus Aid") have articles on the issue.

State governments have the same issue.  Requirements for balanced budgets and revenue reductions and many states are already addressing the likely budget shortfalls ("Coronavirus deals one-two financial punch to state budgets," Associated Press; "Northam freezes new spending in the state budget amid coronavirus pandemic," Washington Post)

The Federal coronavirus stimulus bill has some provisions for providing aid to local and state governments, but the demand for help will probably be much greater than the amount allocated.