Q&A: How fire and EMS leaders can face the economic impacts of the global pandemic
Chief Steve Pegram details the possible financial impacts facing fire and EMS departments as well as the goals of the IAFC’s Economic Task Force
As we navigate the COVID-19 global pandemic, many fire and EMS personnel around the country are currently facing spiking call volumes, strained staffing situations, the constant threat of exposure, and even their own positive diagnoses and treatment.
While firefighters, EMTs and paramedics are on the front lines, facing down a daily “invisible enemy,” as President Trump called COVID-19, there’s another looming threat that is already starting to have a very visible impact – the financial toll of a global pandemic, with its ripple effect through small business and major industries alike.
As the ripple effect extends, many fire and EMS leaders will be seeking guidance for how to traverse the troublesome economic situation facing their departments and communities in the coming weeks, months and possibly years to come.
I connected with Fire Chief Steve Pegram of the Goshen (Ohio) Fire Department to discuss the economic challenges facing fire and EMS. Pegram serves as chair of the IAFC’s newly formed Economic Task Force, developed to help chiefs plan and prepare for the economic impact ahead.
FireRescue1: What do you see as the biggest economic/financial challenge facing fire departments in the next 3-6 months?
Pegram: The short term is a bit of an unknown. We are starting to see the effects of the “Stay Home” orders in many communities and how those are affecting all operations, especially revenue. Already some communities that rely on sales tax, income or earning tax are seeing an impact from one month of shut down of portions of their communities. For example, the City of Cincinnati, Ohio, has furloughed 1,700 employees, citing lost revenue during March.
What about over the next few years?
It is too soon to know, but it is easy to predict that the longer people are out of work, small businesses are closed or limited on the service they can provide effective their revenue and therefore the revenue that is routed back to local government.
The two biggest concerns are the loss of sales tax and income or earnings tax in 2020 and how that can, and already is, affecting communities that rely on those types of revenue. The second would be the concern of what the “new normal” becomes post-pandemic. What businesses don’t re-open? Many small business and local governments don’t have a large rainy-day fund and may not be able to weather 3-6 months of lost revenue.
How does a recession impact fire departments most directly? Do you believe we are currently heading into a recession, already there?
Prior to the pandemic, there were already rumors of a pending recession; however, the pandemic has definitely accelerated the possibility of a recession.
Regardless of what we call the impact of the pandemic on our economy, it is easy to see it’s already begun. The initial impact will be on local governments that are funded through sales tax, income tax/earnings tax, as those tax collections often go toward the current fiscal year budgets.
It’s important to realize that how we fund local government, and especially fire and EMS, is different in almost every community. Even in Ohio where I work, there are three different types of funding among three neighboring fire departments.
The other concern is maybe the income tax and sales tax might not be a direct funding source to fire and EMS, but what happens when city/town councils facing budget deficits cut across the board, as we are already seeing in some communities after less than a month of the “Stay Home” orders.
Longer-term there is concern of property tax defaults. If people are not working or businesses are not open, they may not be able to pay their property tax bills. This could impact 2020 but is a real concern for 2021.
What is the primary goal of the IAFC’s Economic Task Force?
There are two main goals for the Economic Task Force at this point:
- To help fire and EMS chiefs access local, state and especially federal funding being made available in response to the coronavirus pandemic.
- To help fire and EMS chiefs plan and prepare for the economic impact of the pandemic on our communities, both internally at our departments and externally in our communities.
Has the IAFC formed an Economic Task Force in the past for previous economic downturns? What makes this situation unique?
Yes, in 2008–2010 the IAFC had an Economic Task Force. Then-Fire Chief, now Interim IAFC CEO Rob Brown chaired that Task Force and is meeting with the new Economic Task Force this week to share as well as make recommendations from our prior experiences 10 years ago.
The last economic downturn was a financial crisis in that it was triggered by the failure of many banks/mortgage loans and therefore was extremely widespread. The pandemic is unique; it is a public health emergency. The virus doesn’t discriminate based upon how rich or poor a business or a community is and how well they are or are not able to weather the storm. We are already seeing communities’ budgets affected by the pandemic and lost revenue – and we’re only a month into the widespread restrictions on businesses and employees, social distancing, etc.
With this pandemic, fire and EMS chiefs will be facing two issues – and that is why the IAFC created two Task Forces.
The first is the Coronavirus Task Force to tackle how we prepare and respond to the public health emergency. The second is the Economic Task Force to address the short- and long-term economic impact of closed business, layoffs (both in government and in the private sector) cancellation of major events, the travel and hotel industry, and so much more. Although it’s hard to predict, I expect the pandemic to resolve itself sooner than the economic crisis that will come as a result, and it is that for which we hope to help fire and EMS chiefs to prepare.
How will the Economic Task Force work with the Coronavirus Task Force?
Both committees are sharing an IAFC staff liaison. We expect this to be mutually beneficial to ensure both task forces are kept in the loop on what they are working on, support each other as well as prevent mission creep. Additionally, IAFC President Gary Ludwig is participating in many of these meetings as well and is in daily communication with the Task Force chairpersons.
Will the Task Force aid all members of the fire service or is it directed at IAFC members only?
Much of what we will produce and provide back to the fire and EMS service will be open to the public and available to members and non-members through the IAFC website. There may be in the future some training or webinars that are hosted for members of the Association, but those items have not been discussed at this point. The important thing is to get the information out to the fire and EMS industry regardless of membership affiliation.
Can you share a bit about the backgrounds of some of the Task Force members and what makes them uniquely qualified for this work?
All of the Task Force members are tenured fire service leaders with diverse backgrounds. We represent career and volunteer organizations, major metro areas and rural/suburban communities. Several of the members have a background in municipal/government budgeting as a primary job function. As the Task Force meets and we identify needs, we plan to add additional members or subject-matter experts to address the problems we encounter and help develop deliverables back to the fire and EMS chiefs.
What are some of the first resources the Task Force plans to tackle?
IAFC already has a healthy webinar series for which both the Coronavirus Task Force as well as the Economic Task Force will be providing updates, content and guest speakers to in the coming weeks.
We also hope to create some guidance documents on how fire and EMS departments can access the federal funds that are being made available, identify and help the members applying for any grant funding.
Our next meeting will involve updates and coordination with our IAFC staff, Coronavirus Task Force as well as the IAFC legislative staff to help coordinate and decide what items and issues are the first priority for our future deliverables.
We expect to roll out some initial guidance documents and webinars soon, and expect that to be continued for the foreseeable future, as the pandemic, and the economic impact of the pandemic, continue.