Magazine article Government Finance Review

Survey: City Finances Still Deteriorating

Magazine article Government Finance Review

Survey: City Finances Still Deteriorating

Article excerpt

America's cities were less able to meet their financial needs in 2004, and expectations for 2005 are equally grim, according to "City Fiscal Conditions 2004," a recently released report by the National League of Cities. Revenues are not keeping pace with increases in spending for public safety and infrastructure, and growing costs of employee health benefits, pensions, and wages.

In this latest annual survey of city finance directors, more than three in five indicated that their cities were less able to meet their fiscal obligations, regardless of population size, region, or taxing authority. Eighty-three percent of the cities that rely primarily on the income tax to fund government reported deteriorating fiscal conditions--much higher than those that rely primarily on the property tax (58 percent) or the sales tax.

"This is the third year in a row where we've seen these types of revenue declines," said James C. Hunt, vice president of the National League of Cities and a member of the City Council in Clarksburg, West Virginia. "As elected officials, we can only stretch our resources so far, tighten our belts so much. …

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