The Economy Meeting Fiscal Needs

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.

  • Property values continue at levels far below their 2007 peaks.
  • Consumer spending is slowing as the household savings rate increases.
  • Consumer confidence is eroding.
  • Markets could be entering the worst double-dip recession since the Great Depression.

Survey findings suggest that city finance officers' perceptions are still mostly negative, but they are not necessarily worsening.  America's cities are not looking to the past as a guidepost for the future. Indeed, lower property values and declining sales may portend something entirely new, a 'new normal.'


 

Fifty-seven percent of city finance officers report that their cities are less able to meet fiscal needs in 2011 than in 2010. City finance officers' comparative assessment of their cities' fiscal conditions from year to year in 2011 improved from their 2010 assessment, when 87 percent of city finance officers said their cities were less able to meet fiscal needs than in 2009, the highest level in the history of NLC's 25-year survey.


 

Finance officers in cities that rely more upon property taxes (73%) - the most common local tax source - are more likely to say that their cities are less able to meet fiscal needs in 2011 than those in cities reliant upon sales taxes (50%) or income taxes (47%).