NLC Survey Shows Intensified Financial Pain for Cities

By Minchak, Gregory; Hogan, Cyndy Liedtke | Nation's Cities Weekly, October 11, 2010 | Go to article overview

NLC Survey Shows Intensified Financial Pain for Cities


Minchak, Gregory, Hogan, Cyndy Liedtke, Nation's Cities Weekly


Cities' finances continue to weaken under the strain of the recession, resulting in cities being less able to meet their fiscal needs in 2011 and beyond, according to the latest research from NLC.

In NLC's annual report on cities' fiscal conditions, financial officers report the largest spending cuts and loss of revenue in the 25-year history of the survey. In the research brief, "City Fiscal Conditions in 2010," 87 percent of city finance officers report their cities are worse off financially than in 2009.

"This year's report reveals that while the recession might have officially ended in terms of the national economy, cities are now in the eye of the storm in terms of the recession's impact on budgets," said Chris Hoene, co-author of the report and director of NLC's Center for Research and Innovation. "For many cities, the pain is intensifying."

The pain is often coming in the form of service and staff cuts to balance city budgets.

Financial pressures are forcing cities to lay off workers (79 percent), delay or cancel capital infrastructure projects (69 percent), and modify health benefits (34 percent). There were also significant increases in the number of officers reporting across-the-board services cuts (25 percent) and public safety cuts (25 percent). Public safety is usually reduced only as a last resort option.

NLC President Ronald O. Loveridge, mayor of Riverside, Calif., said "the easy cuts are gone" as cities are facing the third and fourth years of tight budgets resulting from the financial crisis, including a downturn in real estate values and reduced sales tax revenues.

"Cities balance our budgets because we have to," be said, bur the extraordinary pain of the recession has made it a different time for cities and towns.

"This historic recession has forced city officials to make difficult decisions that impact the social and economic fabric of their communities," said Loveridge. "This recession is making city officials fundamentally rethink and repurpose the provision of services in their communities. Some are innovating and finding creative solutions but, regrettably, without the necessary resources, cities will continue to have a difficult time assisting their residents through these trying economic times."

Cities are in the worst fiscal shape they've been in since the Great Depression, said the report's co-author, Michael A. …

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NLC Survey Shows Intensified Financial Pain for Cities
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