CLEVELAND, Ohio – The City of Cleveland would have faced financial chaos and potential layoffs, had it not received hundreds of millions of COVID-19 stimulus dollars from the federal government, a top official said Thursday.that a combination of federal programs aimed at alleviating the city’s financial troubles from COVID-19 prevented the city from having to cut wages and even potentially lay off employees.
“Without the CARES Act funds, which the city used to shore up the budget, there would have been some combination of furloughs, hiring freezes, wage cuts, potential layoffs ,” Abonamah said. “Without that ARPA money that was transferred into the general fund in 2021, we would have faced similar choices in 2021-2022, given the structural deficits we faced. And so having that money in the general fund really staved off disaster for the city and its workforce.
Local governments had the option to declare either $10 million of revenue loss regardless of government size, or to follow . While many small governments elected to declare $10 million in revenue loss, larger places such as Cleveland followed the formula, which allowed them to declare more money as “revenue recovery” -- a distinction that allows cities more flexibility when spending.