The National League of Cities has released its most recent report of fiscal conditions in cities across the country. The 26th annual report shows that the economic downturn contiues to have a negative impact.
The report reveals that city revenues continue to decline, with a projected -2.3% decrease by the end of 2011. This marks the fifth staight year of declines in revenue. Further declines are probable for 2012.
The declines come from primarily two factors, falling property tax revenues and significant decreases in state aid. Since 2009, cities have consistently reported cuts in general aid, shared revenues and reductions in reimbursements and other transfers.
In response, cities report they are continuing to cut personnel (72%), delay infrastructure projects (60%) and, increase fees (41%). Over a third also report making changes to employee health care benefits. And, nearly 60% of finance officers report that their cities are less able to meet financial needs in 2011 than in 2010.
Donald J. Borut, Executive Director of the National League of Cities noted that "city officials are making difficult decisions and are working hard to find innovative solutions to reenergize their communities." And, Christopher Hoene, Director of the Center for Research and Innovation at the National League of Cities noted that "if regional housing markets, unemployment, and consumer confidence struggle, city revenues will continue to lag, city leaders will face more cuts, and those decisions will act as a drag on the national economy."
Arnold Weinfeld is Director of Strategic Initiatives and Federal Affairs for the Michigan Municipal League. He can be reached at 517-908-0304 or by e-mail
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