In constant dollars (adjusted to account for inflationary factors in the state-local sector), general fund revenues in 2011 declined -2.3% from 2010 revenues, while expenditures declined by -4.0%*. Looking to the close of 2012, city finance officers project that general fund revenues will decline by -3.9% and expenditures will grow slightly, by 0.3%
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In comparison to previous periods, the past twelve years have been marked primarily by challenging city fiscal conditions. Recessions in 2001 and 2008-09 were followed by anemic economic recoveries. Since city revenue collections typically lag economic transitions, it is likely that city fiscal conditions will remain weakened in 2013.
* “Constant dollars” refers to inflation-adjusted dollars. “Current dollars” refers to non-adjusted dollars. To calculate constant dollars, we adjust current dollars using the U.S. Bureau of Economic Analysis (BEA) National Income and Product Account (NIPA) estimate for inflation in the state and local government sector. Constant dollars are a more accurate source of comparison over time because the dollars are adjusted to account for differences in the costs of state and local government.