Report: Cities Need States to Provide More Authority to Collect Revenue

Press Release
Press Release

WASHINGTON - The National League of Cities (NLC) today released its 2015 Cities and State Fiscal Structures report, which found that no state has expanded the fiscal authority of its cities since the start of the recession. The report provides a comparative assessment of local fiscal systems in each of the 50 states, including taxing authority, revenue reliance and capacity, state aid, and tax and expenditure limits. The Cities and State Fiscal Structures report was produced in partnership with NLC's state league members and was last issued in 2008.

City finances have been slow to recover from the recession in part because of continued constraints from states on cities' ability to raise revenues. The options available to local governments are determined by their states. State actions can hinder cities' fiscal autonomy by providing limited access to tax sources, placing caps on tax revenue and cutting aid, for example. However, the report also notes that state fiscal systems have the potential to create an environment that will allow municipalities to fund their share of resident needs and to thrive economically.

"The Cities and State Fiscal Structures report supports the fact that cities and towns need more fiscal autonomy to balance their budgets, create economic growth and meet their communities' needs," said Clarence E. Anthony, CEO and president of the National League of Cities.

The report examines state-local fiscal structures and uses data from the Census of Governments, as well as detailed information from the state municipal leagues. Cities and State Fiscal Structures is the first report in a research collaborative between NLC and the state municipal leagues. Additional information and research from NLC's Center for City Solutions and Applied Research can be found here.

The National League of Cities (NLC) is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.

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