Illustration: Sarah Grillo/Axios

Cities were already furloughing workers and considering cutting back essential services — including public safety — because of the dramatic drops in the local tax revenue that funds them. Now they're also dealing with turmoil in their streets.

Why it matters: "Unfortunately, the increasing levels of social unrest across the country reallocated efforts and scarce resources away from the former focus of getting state, regional and local economies back to some semblance of normalcy," per Tom Kozlik, head of municipal strategy and credit at HilltopSecurities.

  • "Virus-related safety and health concerns are likely to begin to heighten, especially if the lack of social distancing in recent days causes COVID-19 cases to escalate," he wrote in an analyst note. "This could be another obstacle to the reopening process."

The big picture: The overall budget shortfall for cities, towns and villages is expected to top $360 billion between 2020 and 2022, according to a May National League of Cities analysis. The Upjohn Institute projects a roughly $900 billion shortfall for state and local governments through the end of 2021.

Where it stands: Washington leaders are still far away from passing the next coronavirus relief package, as congressional Republicans and Trump administration officials say they must wait to evaluate the economic impact of the CARES Act and reopening before passing another large stimulus package, per Axios' Alayna Treene.

  • Senate Majority Whip John Thune said this week that the next round of funding isn’t expected until July.
  • Mitch McConnell recently told President Trump and Treasury Secretary Steven Mnuchin that he wants the phase four bill to be narrow in scope and focus on short-term economic relief, not longer-term recovery.
  • A top priority for GOP lawmakers is for the bill to include incentives for people to get back to work, as well as liability protection for businesses that are reopening. 

City leaders are increasingly frustrated that Congress has not stepped in to provide more relief directly to cities, and states are slashing budgets.

  • "Trump is going around saying police can make cities safer. But you know what isn't going to make cities safer is laying off police officers and firefighters," said Cincinnati Mayor John Cranley. "Even if Cincinnati can weather the storm, if my neighbor has to lay off cops, it's going to impact my town."
  • Cincinnati, which is expecting a deficit of $80 million for the fiscal year, furloughed 1,700 employees and hopes to bring them all back July 1.
  • "Our budgets are gutted," said Kansas City, Missouri, Mayor Quinton Lucas. "No mayor knows how bad it's going to get. Everything is on the table when it comes to cuts, and that means public safety, too."

What's next: Congressional Republicans and the Trump administration have said the House-passed, $3 trillion Heroes Act is a nonstarter.

  • The likely pathway is, once GOP lawmakers feel they have properly evaluated the impact of the legislation they've already passed, they will draft their own bill. They will then negotiate that version with Democrats.

Go deeper: Inside the idea of state bankruptcy

Go deeper

5 mins ago - Health

Texas governor mandates face masks in public spaces

Photo: Mario Tama/Getty Images

Texas Gov. Greg Abbott (R) issued an executive order Thursday requiring all Texans to wear a face covering in public in counties with 20 or more positive coronavirus cases.

Why it matters: It's a stark reversal for the Republican governor that underscores the seriousness of the outbreak in Texas, which set a single-day record on Wednesday with more than 8,000 confirmed new cases. On June 3, Abbott issued an executive order banning local governments from imposing fines on people who don't wear masks in public.

This story is developing. Please check back for updates.

21 mins ago - Health

Top business leaders urge White House to develop mandatory mask guidelines

A man walks past a Ramen restaurant in Los Angeles, California on July 1. Photo: Frederic J. Brown/AFP via Getty Images

The heads of the U.S. Chamber of Commerce, Business Roundtable, National Retail Federation and other top business organizations wrote an open letter on Thursday urging the White House coronavirus task force to work with governors to make face coverings mandatory in all public spaces.

Driving the news: An analysis led by Goldman Sachs' chief economist found that a national mandate requiring face coverings would "could potentially substitute for lockdowns that would otherwise subtract nearly 5% from GDP," the Washington Post reports.

Updated 51 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3:30 p.m. ET: 10,763,604 — Total deaths: 517,667 — Total recoveries — 5,522,094Map.
  2. U.S.: Total confirmed cases as of 3:30 p.m. ET: 2,715,124 — Total deaths: 128,439 — Total recoveries: 729,994 — Total tested: 32,827,359Map.
  3. Public health: What we know about the immune response to coronavirus and what it means for a vaccine.
  4. Politics: Herman Cain hospitalized for COVID-19 after attending Trump Tulsa rally — Biden downplays jobs number, rebukes Trump for ignoring health crisis.
  5. States: Florida reports more than 10,000 new coronavirus cases — 5 states saw 27% spike in heart-related deaths in first 3 months of coronavirus pandemic.