Washington, D.C. — The National League of Cities (NLC) today released its 2025 City Fiscal Conditions report, the nation’s most comprehensive annual analysis of the financial health of U.S. municipalities. Now in its 40th year, the report provides a clear view into how cities of all sizes are managing their budgets, revenues and expenditures amid shifting economic conditions.
Based on survey data from city chief financial officers and finance directors across the country, the 2025 findings show that cities are now navigating a more complex environment shaped by inflationary pressures, slowing revenue growth and the winding down of extraordinary federal aid.
“City leaders are on the frontlines of America’s economy and have shown their resilience, particularly these last few years coming through the pandemic and more,” said Clarence E. Anthony, CEO and Executive Director of the National League of Cities. “As the fiscal landscape shifts for municipalities, once again, they are pivoting and responding to ensure they can continue to build strong communities and make the critical investments in housing, infrastructure and public safety — that are top of mind, important to their residents and for the continued strengthening of the national economy.”
Among the key findings of the City Fiscal Conditions 2025 report:
- Cities saw a 7.5 percent increase in general fund spending in FY2024, but growth slowed to just 0.7 percent in FY2025.
- Public safety remains the largest area of municipal spending, accounting for 60 percent of general fund budgets in FY2025.
- Only 45 percent of city finance officers feel optimistic about meeting fiscal needs in FY2026, down from 64 percent in 2024.
The report also underscores the interconnectedness of local and national fiscal health, showing how cities’ ability to balance budgets directly affects regional growth, workforce development, and public investment.
The City Fiscal Conditions 2025 report is available for download now.
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The National League of Cities (NLC) is 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.