Greg Fischer, mayor of Louisville, Kentucky, said the assistance ignores smaller communities’ needs. “The cold reality of this pandemic is the cost of these actions to take care of our city right now are blowing massive holes in our budget, and our experience in Louisville is playing out in cities of all sizes throughout America,” he said in a call with reporters.

Meanwhile, the Federal Reserve’s $500 billion short-term lending program to help governments get over short-term cash crunches is only available to states and the 10 cities and 16 counties that are big enough to meet the minimum population requirements, according to Census figures. It will offer little relief if governments don’t have the revenue to back such borrowings.

The central bank’s loans are “no substitute for direct grants to states,” said Elizabeth McNichol, a senior fellow at the Center on Budget and Policy Priorities, a liberal-leaning think tank that says state budget shortfalls could eclipse what was seen in 2008.

McNichol said some states may not be in the position of paying back the debt to the Fed while they’re still in an economic downturn. “Grants are what is really needed now,” she said.

Maryland may see a $2.8 billion shortfall, causing Republican Governor Larry Hogan to institute a hiring freeze and tell state agencies to prepare budget cuts. In Kentucky, Democratic Governor Andy Beshear says he will have to abandon a budget proposal that would give teachers a $2,000 pay raise and boost education spending. In Wisconsin, the state could see a $2 billion drop in revenue, which Governor Tony Evers said will hurt its ability to help the growing number of unemployed residents.

‘Gone Tomorrow’
Cities and states are having to figure out how to balance the need for budget cuts with trying to minimize the impact on residents that are sick, losing their jobs or seeing pay cuts. El Paso Mayor Dee Margo said in a call with reporters that he’s expecting a shortfall of $26 million, leaving him looking for ways to cut services.

At the same time, El Paso is trying to support residents affected by the economic toll of the virus, expecting that cuts to city employee pay will help cover a $100,000 payment to a local food bank.

“Everyone’s going to feel a financial burden,” Margo said.

Even some of the most financially-sound cities are struggling. Arlington, Virginia, which has a AAA credit rating and wealthy tax base, is facing a $100 million budget shortfall from the virus, forcing City Manager Mark Jinks to cut his fiscal 2021 budget proposal by almost 6%.

“With recessions, usually you see it coming, you get warning signs. You slide into it, you slide out of it,” Jinks said in an interview. “This was literally revenues here today, gone tomorrow.”