By Michael A. Pagano and Christopher W. Hoene
Te nation’s city nance ocers report that the scal condition of cities in 2012 continues to reect the prolonged eectsof the economic downturn.
Local and regional economies characterized by struggling housing markets, slow consumerspending and high levels of unemployment continue to drive declines in city revenues. In response, cities cut personnel,infrastructure investments and key services. Despite these challenges, a majority of city nance ocers report that theircities are better able to meet nancial needs in 2012 than in 2011.Findings from the National League of Cities’ latest annual survey of city nance ocers include:
As nance ocers look to the close of 2012, they project the sixth year in a row of year-over-yeardeclining revenues;
Tere is a continued decline in property tax revenues in 2012, reecting the inevitable and laggedimpact of real estate market declines;
Ending balances, or “reserves,” have declined by over 25% in four years and, while still atmodestly high levels, are projected to decline as cities use these balances to weather the effectsof the downturn;
Fiscal pressures on cities include declining local tax bases, infrastructure costs, employee-relatedcosts for health care, pensions, and wages and cuts in state and federal aid; and,
Confronted with these pressures and conditions, cities are reducing personnel commitments, delayingor cancelling infrastructure projects, and cutting local services.
1 Michael A. Pagano is Dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. Christopher W. Hoene is Director of the Center for Research and Innovation at the National League of Cities. Christiana McFarland is research mangerand Program Director, Finance and Economic Development. The authors would like to acknowledge the respondents to this year’s scal survey. The commitment of these cities’ nance ofcers to the project is greatly appreciated. The authors are also grateful to ShuWang, doctoral student in the Department of Public Administration at UIC, for her assistance in collecting general-fund data on the nation’s largest 75 cities & Will McGahan, Outreach Associate for his administration of the survey. The nancial support of the John D.and Catherine T. MacArthur Foundation is greatly appreciated.2 All references to specic years are for scal years as dened by the individual cities. The use of cities or city in this report refers to municipal corporations.
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pmb 2012by michael A. pagano, Christoher W. Hoene & Christiana mcFarland
City Fiscal Conditions in 2012
CENTERFOR RESEARCH& INNOVATION
The City Fiscal Conditions Survey is a national mail and online survey of nance ofcers in U.S. cities conducted in thespring-summer of each year. This is the 27th edition of the survey, which began in 1986.