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Cities Cut Jobs and Infrastructure as Finances Continue to Weaken

September 29, 2011 Comments off

Cities Cut Jobs and Infrastructure as Finances Continue to Weaken
Source: National League of Cities

The nation’s cities are cutting personnel and infrastructure projects as the economic downturn continues to take its toll on city finances according to the National League of Cities’ (NLC) 26th annual City Fiscal Conditions report.

The report reveals that general city revenues are continuing to fall, with a projected -2.3% decrease by the end of 2011. This is the fifth straight year of declines in revenue with probable further declines in 2012.

The revenue decline is mainly due to the suppressed property market that is negatively impacting property tax revenue. Property tax collections are expected to decline by -3.7% with further declines likely in 2012 and 2013.

Income tax receipts are also experiencing a decrease of -1.6%. Sales tax receipts remained largely flat, but this is at last year’s level which saw the worst decrease in sales tax revenue in 15 years.

Cities are responding by cutting personnel (72%), delaying infrastructure projects (60%) and increasing service fees (41%). One in three (36%) cities report modifications to employee health care benefits.

Categories: business and economics, government and politics, infrastructure, labor, National League of Cities, taxation
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