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.
City fiscal conditions in 2011 continue to weaken, but city finance officers’ perceptions may reflect a “new normal” in terms of their assessment and expectations of meeting nearer-term financial needs.
Revenue and spending shifts in 2010 and 2011 portray a worsening fiscal picture for America’s cities.
A number of factors combine to determine the revenue performance, spending levels and overall fiscal condition of cities.
The most common city responses to declinging fiscal conditions are personnel cuts and delaying and/or cancelling infrastructure projects.
Cuts that states are making reduce aid and transfers to city governments.
Cities can prepare for future fiscal challenges by maintaining adequate levels of general fund ending balances.
The fiscal realities confronting cities include a number of persistent concerns.