WASHINGTON, DC – Today, the National League of Cities released its annual 2023 City Fiscal Conditions Report, providing valuable insights into the financial health of cities three years after the pandemic.
This year’s report, based on a comprehensive analysis of data from 820 cities reveals four key takeaways that reflect the resilience and adaptability of city finances in the face of unprecedented challenges:
- Cautious budgeting resulted in better preparation: The cautious approach by many cities in 2023 yielded increased reserves and limited spending demonstrating that local governments remain good stewards of public dollars.
- Better able to weather inflation: Despite the challenge of inflation, the average city experienced more than a six percent increase in general fund revenues. Inflation is more manageable, and cities are reaping some benefits of lower inflation.
- Federal aid had a positive impact on city budgets: Direct federal aid through the American Rescue Plan Act (ARPA) and the bipartisan infrastructure law was among the factors that had a positive impact on cities’ ability to balance their 2023 budgets.
- Planning for uncertainties: Making it through a strong 2023 fiscal year, our survey analysis reveals that many cities are still very cautious in their budgeting and planning for the current and next fiscal year, as they anticipate potential risks and uncertainties in the post-COVID era. Among the concerns for local leaders is the ‘ARPA cliff’ and the expected end of federal funding through ARPA.
“This year, we surveyed more governments than any other year. We learned that cities are back on their feet, but they are cautious about the future.” – Farhad Omeyr, Ph.D., Program Director, Research and Data, NLC
“We took a slow, methodical approach on how we were going to use our ARPA funds. The first thing we did was have a community survey and focus groups on what were the actual needs of our community. We did a rental assistance program where over $1M has been spent in the community to help with rental issues, adding to our police force, and social services. We were really careful to make sure that we weren’t using ARPA for operating costs, our use of APRA was focused on one-time programs and getting the money to our local economy.” – Kimberly Lord, Director of Finance, Manchester, CT
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For more information about the 2023 City Fiscal Conditions Report, please visit https://www.nlc.org/resource/city-fiscal-conditions-2023/.
The National League of Cities (NLC) the voice of America’s cities, towns and villages, representing more than 200 million people. NLC works to strengthen local leadership, influence federal policy and drive innovative solutions. Stay connected with NLC on Facebook, Twitter, LinkedIn and Instagram.