A number of factors combine to determine the revenue performance, spending levels and overall fiscal condition of cities.
- City finance directors report that employee health benefit costs and pension costs have increased.
- Infrastructure and public safety demands have increased.
- Prices, or costs, of services have increased.
- Federal and state aid to cities have decreased.
- The local tax base and the health of local economy have decreased.
Each year, the survey presents city finance directors with a list of factors that affect city budgets. Respondents are asked whether each of the factors increased or decreased from the previous year and whether the change is having a positive or negative influence on the city’s overall fiscal picture.
Leading the list of factors that finance officers say have increased over the previous year are health benefit costs (81%) and pension costs (77%). Infrastructure (75%) and public safety (61%) demands were most often noted as increasing among specific service arenas. Increases in prices, or costs of services, were also noted by most city finance officers (83%).
Leading factors that city finance officers report to have decreased are levels of federal aid (51%), state aid (50%), the local tax base (47%) and the health of the local economy (42%).
View Larger Image
When asked about the positive or negative impact of each factor on city finances in 2012, at least seven in ten city finance officers cited service costs (79%), health benefit costs (77%), pension costs (74%), and infrastructure demands (70%) as negatively effecting city budgets.
About half of city finance officers also cited levels of federal (45%) and state (50%) aid, public safety costs (57%), and a declining tax base (48%) as having negative effects.
View Larger Image