City Trends

8/8/2019 City Trends

1/8

Te nations city nance ocers report that the scal condition o the nations cities continues to weaken in 2010 as cities conrontthe efects o the economic downturn.2 Local and regional economies characterized by struggling housing markets, slow consumespending, and high levels o unemployment are driving declines in city revenues. In response, cities are cutting personnel, inrastructureinvestments and key services. Findings rom the National League o Cities latest annual survey o city nance ocers include:

nNearly nine in ten city nance ocers report that their cities are less able to meet scal needs in 2010 than in theprevious year;

nAs nance ocers look to the close o 2010, they report declining revenues and spending cutbacks in response tothe economic downturn;

nProperty tax revenues are beginning to decline in 2010, ater years o annual growth, reecting the gradual, butinevitable, impact o housing market declines in recent years;

nCity sales tax revenues declined dramatically in 2009 and are declining urther in 2010;

nFiscal pressures conronting cities include declining local economic health, public saety and inrastructure costs,employee-related costs or health care, pensions, and wages, and cuts in state aid;

no cover budget shortalls and balance annual budgets, cities are making a variety o personnel cuts, delaying orcancelling inrastructure projects, and cutting basic city serv ices; and,

nEnding balances, or reserves, while still at high levels, decreased or the second year in a row as cities usedthese balances to weather the efects o the downturn.

Mtn Fscal ndsIn 2010, nearly nine in ten (87%) city nanceocers report that their cities are less able tomeet scal needs than in 2009 (See Figure1). City nance ocers assessment o theircities scal conditions in 2010 is essential ly atthe same level as their 2009 assessment, when88 percent o city nance ocers said theircities were less able to meet scal needs thanin 2008. Concern about cities scal healthremains at the highest level in the historyo NLCs 25-year survey. Finance ocersin cities that rely upon property taxes andsales taxes the two most common local taxsources are equally likely to say that theircities are less able to meet scal needs in 2010

1 Christopher W. Hoene is Director of the Center for Research and Innovation at the National League of Cities. Michael A. Pagano is Dean of the College of Urban Planning an d Public Affairs at the University of Illinois at Chicago. He has written the annual City FiscalConditions report for NLC since 1991. The authors would like to acknowledge the 338 respondents to this years scal survey. The commitment of these cities nance ofcers to the project is greatly appreciated.

2 All references to specic years are for scal years as dened by the individual cities. The use of cities or city in this report refers to municipal corporations.

OOb 2010by hristopher W. Hoene & Michael A. Pagano1

Rr Br Americas ities

City Fiscal Conditions in 2010

CENTERFOR RESEARCH

& INNOVATION

Figre 1: Percent of Cities Better Able/Less Able to Meet Financial Needs in FY 2010

-67%

33%

-79%

21%

-78%

22%

-66%

34%

-46%

54%

-42%

58%

-35%

65%

-32%

68%

-31%

69%

-25%

75%

-27%

73%

-44%

56%

-55%

45%

-81%

19%

-63%

37%

-37%

63%

-35%

65%

-30%

70%

-64%

36%

-88%

12%

-100%

-80%

-60%

-40%

-20%

0

20%

40%

60%

80%

100%

%o

fCities

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Better able

Less able

-87%

13%

Te City Fiscal Conditions Survey is a national mail and online survey o nance ofcers in U.S. cities conducted in the spring-summer o each year.Tis is the 25th edition o the survey, which began in 1986.


2/8

ReseaRch BRief on ameRicas cities

2

(See Figure 1A). Finance ocers in the West are slightly more likely to say that their cities are worse of in 2010 than nance ocersin cities in other regions (See Figure 1B).3 Relatively similar levels o concern were expressed across cities o varying sizes.

Rvnu and spndn tRndsCities ended scal year 2009 with year-to-year general und expenditures outpacing general und revenues.4In constant dollars(adjusted to account or inationary actors in the state-local sector), general und revenues in 2009 declined -2.5% over 2008 revenues

while expenditures increased marginally by 0.7%.5 Looking to the close o 2010, city nance ocers project that general und revenueswill decline by -3.2% and expenditures wi ll decline by -2.3% (See Figure 2).

3 Regional classications are based on U .S Census-dened regions: Northeast includes cities in CT, ME, MA, NH, NJ, NY, PA, RI, VT; Midwest includes cities in IL, IN, IA, KS, MI, MN, MO, NE, ND, OH, SD, WI; South includes cities in AL, AR, DE, DC, FL, GA, KY, LAMD, MS, NC, OK, SC, TN, TX, VA, WV; West includes cities in AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY.

4 The General Fund is the largest and most common fund of all cities, accounting for approximately two-thirds of city revenues across the municipal sector.5 Constant dollars refers to ination-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

ination 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.

13%

-87%

30%

-70%

-88%

% of Cities

SalesTax Cities

IncomeTax Cities

PropertyTax Cities

Better AbleLess Able

-100% -80% -60% -40% -20% 0% 20% 40%

12%

Figre 1a: Percent of Cities Better Able/Less Able to Meet Financial Needs inFY 2010 by Tax Authority

24%

-76%

12%

-88%

17%

-83%

9%

-91%

% of Cities

Northeast

Cities

Midwest

Cities

Southern

Cities

Western

Cities

Better Able

Less Able

-100% -80% -60% -40% -20% 0% 20% 40%

Figre 1B: Percent of Cities Better Able/Less Able To Meet Financial Needs inFY 2010, by Region

-3.2%

4.1%

1.0%

3.8%

2.2%

0.2%0.0%

1.6%

0.7%0.9% 1.3%

3.1%

1.8%

2.8%

0.6%

1.6%

0.0%

0.2%

1.9%

-0.2%

0.8%

1.5%

-0.6%

-1.7%

-2.5%

3.7%

0.5%

2.2%

1.2%

2.5%

1.3% 1.1%

-0.6%

0.5%

1.5%

4.1%

1.7%

2.0% 1.6%1.4%

2.5%

3.3%

2.3%

0.2%

1.6%2.3%

-0.1%

0.7%

0.7%

-2%

0%

2%

4%

6%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

R

ecession

7/90

-3/91

R

ecession

3/01-

11/01

Change in Constant Dollar Revenue (General Fund)Change in Constant Dollar Expenditures (General Fund)

-4%

-2.3%

R

ecession

12/07-

6/09

2010

Figre 2: Year-to-Year Change in General Fund Revenues and Expenditures ( Constant Dollars)


3/8

city fiscal conditions in 2010

3

Revenue and spending shits in 2009 and 2010 paint a worsening scal picture or Americas cities. Te declines in 2010 representthe largest downturn in revenues and cutbacks in spending in the history o NLCs survey, with revenues declining or the ourth

year in row (since 2007). In comparison to previous periods, the most recent decade, with recessions in 2001 and 2008-09, was onecharacterized by little stability in city scal conditions, and the efects o the current downturn are already more signicant or citybudgets that or the previous recessions tracked in NLCs survey. City budgets tend to lag economic conditions by 18 months to severa

years, which suggests that 2011 will likely conront urther revenue declines and cuts in city spending.(For more on the lag between

economic changes and city revenues see page 7).

tax RvnusTe scal condition o individual cities varies greatly depending on diferences in local tax structure and reliance. While an overwhelmingmajority o cities have access to a local property tax, many are also reliant upon local sales taxes and some are reliant upon local incometaxes. Understanding the difering perormance o these tax sources and the connections to broader economic conditions helps explainthe orces behind declining city revenues.6

Local property tax revenues are driven primarily by the value o residential and commercial property, with property tax bills determinedby local governments assessment o the value o property. Property tax collections lag the real estate market because local assessmenpractices take time to catch up with changes in the market. As a result, current property tax bills and property tax collections typicallyreect values o property rom anywhere rom eighteen months to several years prior.

Te efects o the well-publicized downturn in the real estate market in recent years are now evident in city property tax revenuesbut do not yet reect the ull efects o the economic downturn. Collections or 2009 continued to reveal strong revenue growth asassessments caught up with the previous growth in the real estate market. Property tax revenues increased in 2009 by 4.2%, compared

with 2008 levels, in constant dollars. Projected property tax collections or 2010, however, point to some o the impact o the downturnin real estate values. Property tax revenues or 2010 reveal the rst constant dollar decline (-1.8%). Te ull weight o the decline inhousing values has yet to hit the budgets o many cities and property tax revenues will likely decline urther in 2011 and 2012 asdeclining property values continue to be reected in city property tax assessments and collections (See Figure 3).

3.6%3.4%

6%

2.4%2.8%

-5.3%

-3.4%-3.2%

1%0.5%

3%2.3%

-6.6%

1.2%

4.2%

0.9%

-5.1%-4.7%

-2.3%

-1.2%

2.3%

-2.5%

2.2%

1.3%1.3%

2%

1.5% 1.4%1%

2%

4.4%

0.6%

3.3%

2.2%

4%

6.3% 6.2%

4.2%

-0.3%

-.05% -.1% -0.2%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Sales Tax Collections

Income Tax Collections

Property Tax Collections

1996

1997

2000

1999

1998

2001

2002

2003

2004

2005

2006

2007

2008

2009

-5%

1.8%

2010

(bud

geted)

1.8%

Figre 3: Year-to-Year Change in General Fund Tax Receipts (Constant Dollars)

6 For more information on variation in local and state tax structures, see Cities and State Fiscal Structure, NLC (2009) at http://www.nlc.org/resources_for_cities/publications/1637.aspx.


4/8


4

Changes in economic conditions are also evident in terms o changes in city sales tax collections. When consumer condence ishigh, people spend more on goods and services and city governments with sales-tax authority reap the benets through increasesin sales tax collections. For much o this decade, consumer spending was also ueled by a strong real estate market that providedadditional wealth to homeowners. Te struggling economy and the declining rea l estate market have reduced consumer condenceresulting in less consumer spending and declining sales tax revenues. City sales tax receipts declined in 2009 over previous yearreceipts by -6.6% in constant dollars and city nance ocers project urther decline in 2010 by -4.9%.

City income tax receipts have been airly at, or have declined, or most o the past decade in constant dollars. Local income taxrevenues are driven primarily by income and wages, not capital gains. Te lack o growth in these revenues suggests that economicrecovery ollowing the 2001 recession was, as many economists have noted, a recovery characterized by a lack o growth in jobssalaries, and wages. Projections or 2010 are or an increase o 1.8%. Tese small, but seemingly counter-intuitive, results are likelythe unction o a couple o actors. First, because relatively ew cities have a local income tax, the results rom a ew larger cities canoten drive overall trends. Second, there is oten a considerable lag between economic changes and shits in income tax collections.Unemployment oten lags other economic indicators and the efects o high unemployment on wages and compensation wil l likelyintensiy in uture years. For 2010, or in-stance, the City o Columbus implementeda voter-approved increase in the citys localincome tax. Te City o Indianapolis andmany other Indiana cities income tax distri-butions rom the state increased in 2010, but

many are projected to decrease signicantlyin 2011.

City nance ocers are thereore predictinglittle growth or actual declines in all threemajor sources o tax revenue or cities in2010. With national economic indicatorspointing to continued struggles, the impactso those economic conditions on local revenuesources, and the lag between decliningeconomic conditions and local revenueimpacts, all indications point to worseningcity scal conditions in 2010 and 2011.

FactoRs nFluncncty BudtsA number o actors combine to determinethe revenue perormance, spending levels,and overall scal condition o cities. Each

year, NLCs survey presents city nancedirectors with a list o actors that afect citybudgets.7 Respondents are asked whethereach o the actors increased or decreasedrom the previous year and whether the

change is having a positive or negativeinuence on the citys overall scal picture.Leading the list o actors that nanceocers say have increased over the previous

year are employee health benet costs (83%)and pension costs (81%). Inrastructureneeds (76%) and public saety (68%) costs

were most oten noted as increasing among

7 The factors include: infrastructure needs, public safety needs, human service needs, education needs, employee wages, employee pension costs, employee health benet costs, prices and ination, amount of federal aid, amount of state aid, federal non-environmentamandates, federal environmental mandates, state non-environmental mandates, state environmental mandates, state tax and expenditure limitations, population, city tax base, and the health of the local economy.

49%

76%

68%

83%

60%

28%30%

47% 48%

17%

53%

23% 24%

12%

17%

33%

7%9%

4%2%

3%5%

3%1% 1%

6%3% 2%

22%

0%2%

61%

1%

52%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Wages

Infrastru

cture

PubSaf

ety

HealthB

enefts

Prices/

Inflation

Pension

s

FedEnv

Manda

tes

StateEn

vMand

ates

Populat

ion

HumanS

ervices

TaxLim

its

Federal

Aid

StateN

on-EnvM

andates

Educati

onStat

eAid

FedNo

n-EnvM

andates

TaxBas

e

Healtho

fLocal

Econ

%o

fCitie

s

Increased Decreased81%

Figre 4: Change in Selected Factors From FY 2010

100%

11%

4% 4%6%

8%5%

2% 1%

14%

4%

1%

50%

2% 2%

11%

2%

30%

7%

54%

73%

61%

81%79%

27% 27%26%

42%

24%22% 24% 22%

64%

16%

54%

77%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Wages

Infrastru

cture

PubSafety

HealthB

enefits

Prices/

Inflation

Pension

s

FedEnv

Manda

tes

StateEn

vMand

ates

Populat

ion

HumanS

ervices

TaxLim

its

Federa

lAid

StateN

on-Env

Manda

tes

Educati

onStat

eAid

FedNo

n-EnvM

andatesTax

Base

Healtho

fLocal

Econ

%o

fCities

Positive Impact

Negative Impact

60%

Figre 5: Impact of Selected Factors on FY 2010 Budgets and Abilit y to Meet Cities Overall Needs


5/8


5

specic service arenas. Leading actors thatcity nance ocers report to have decreasedare the health o the local economy (74%)and levels o state aid to cities (61%) (SeeFigure 4).

When asked about the positive or negative

impact o each actor on city nancesin 2010, our in ve city nance ocerscited employee health benet costs (81%),pension costs (79%) and the health o thelocal economy (77%) as having a negativeimpact. Tree in ve or more city nanceocers also cited inrastructure costs (73%),the level o state aid (64%), and public saetycosts (61%) as having a negative impact (SeeFigure 5).

spndn cuts and

Rvnu actons When asked about the most commonresponses to prospective shortalls this scal

year, by a wide margin the most commonresponses were instituting some kind opersonnel-related cut (79%) and delayingor cancelling capital inrastructure projects (69%). woin ve (44%) reported that their city is making cuts inservices other than public saety and human-socialservices types o services that tend to be higher indemand during economic downturns. One in three (34%)reported modiying health care benets or employees.

For all o the listed cuts, in comparison to 2009, thepercentages o cities taking action 2010 increased (SeeFigure 6).

Te 2010 survey also asked about specic types opersonnel-related cuts made in 2010. Te most commoncut was a hiring reeze (74%). Over hal (54%) o citiesreported salary or wage reductions or reezes and one inthree (35%) cities reported employee layofs. Cuts werealso made in employee development-related activities,including reducing or eliminating travel budgets (59%)and reducing or eliminating proessional developmentbudgets or training, education, and skill building (46%)

(See Figure 7).City nance ocers were also asked about specicrevenue and spending actions taken in 2010. Te mostcommon action taken to boost city revenues has been toincrease the levels o ees or services. wo in ve (40%)o the responding city nance ocers reported that theircity has taken this step. One in our cities also increasedthe number o ees (23%) or increased the local propertytax (23%). Increases in sales, income, or other tax rates

were ar less common (See Figure 8 on the next page).

67%

79%

0%

20092010

HumanServices Cuts

Modify PensionBenefits/Plans

RenegotiateDebt

Across the BoardServices Cut

PublicSafety Cuts

Modify HealthCare Benefits

Cuts inOther Services

Delay/CancelCapital Projects

PersonnelCuts

10% 20% 30% 40% 50% 60% 70% 80% 90%

62%

69%

33%

44%

25%

34%

14%

25%

17%

25%

12%

23%

12%

22%

11%

17%

% of Cities

Figre 6: City Spending Cuts in 2009 and 2010

7%

22%

17%

15%

23%

35%

46%

54%

59%

74%

Reduce pensionbenefits

Revise unioncontracts

Reduce health

care benefits

Furloughs

Earlyretirements

Layoffs

Reduce/eliminate profdevelopment budget

Salary/wagereduction or freeze

Reduce/eliminatetravel budget

Hiring freeze

0% 20% 40% 60% 80%

% of Cities

Figre 7: City personnel-Related Cut s 2010


6/8


6

ndn BalancsOne way that cities prepare or uture scal challenges is to maintain high levels o general und ending balances. Ending balancesare similar to reserves, or what are oten reerred to as rainy day unds, in that they provide a nancial cushion or cities in theevent o a downturn or the need or an unoreseen outlay. Prior to the recession, as city nances experienced sustained growth, cityending balances as a percentage o general und expenditures reached an historical high or the NLC survey o 25 percent, and were

a comparable 24 percent in 2009. However, as economic conditions have made balancing city budgets more dicult in 2009 and2010, ending balances have been utilized to help ll the gap. City nance ocers projected ending balances or 2010 at just under20 percent o general und expenditures (See Figure 9). In total, since the high point in 2007, cities have drawn down total endingbalances by about 20 percent (rom the high o 25.2% to 2010s 19.9%).

Ending balances, which are transerred or-ward to the next scal year in most cases, aremaintained or many reasons. For example,cities build up healthy balances in anticipa-tion o unpredictable events such as naturaldisasters and economic downturns. But theyare also built up deliberately, much like a per-sonal savings account, to set aside unds orplanned events such as construction o water

treatment acilities or other capital projects.Bond underwriters also look at reserves as anindicator o scal responsibility, which canincrease credit ratings and decrease the costso city debt, thereby saving the city money.Finally, as ederal and state aid to cities havebecome smaller proportions o city revenuescities have become more sel-reliant and aremuch more likely to set aside unds or emer-gency or other purposes.

10.5

24.0 23.7

25.224.3

9.010.3 9.6 10.5

12.2

14.1

17.116.6

15.3

17.216.0

16.9

19.0

22.4

24.4

20.8

11.512.3

11.1

13.4

15.0

12.711.8 12.0

13.2

15.7 16.2 16.1

18.0 18.5 18.319.6 19.1 19.1

21.6

11.612.2

8.99.8

12.3

16.9

14.3

0%

5%

10%

15%

20%

25%

30%

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Actual Ending BalanceBudgeted Ending Balance

2009

%o

fCities

21.4

19.9

2010

Figre 9: Ending Balances as a Percentage of Expenditures (General Fund)

3%

40%

6%

23%

2%

23%

4%

9%

3%

12%

5% 4%

2% 2%3%

6%

1%

0

5 %

10%

15%

20%

25%

30%

35%

40%

45%

%

ofCities

Fee Levels Property TaxRate

Number ofFees

Level ofImpact Fees

Other TaxRate

Tax Base Sales TaxRate

Number ofOther Taxes

Income TaxRate

DecreasedIncreased

0%

Figre 8: Revenue Actions in 2010


7/8


7

Byond 20102010 reveals a number o downward trends or city scal conditions. Te impacts o the economic downturn are becoming increasinglyevident in city projections or nal 2010 revenues and expenditures, and in the actions taken in response to changing conditions. Telocal sector o the economy is now ully the midst o a downturn that will be several years in length. Te efects o a depressed realestate market, low levels o consumer condence, and high levels o unemployment will likely play out in cities through 2010, 2011,

and beyond. Te scal realities now conronting cities include a number o concerns:nReal estate markets continue to struggle and tend to be slow to recover rom downturns, which is proving to be

the case this time around, meaning that cities will be conronted with declines or slow growth in uture propertytax revenues;

nOther economic conditions consumer spending, unemployment, and wages are also struggling and willweigh heavily on uture city sales and income tax revenues;

nLarge state government budget shortalls in 2010 and 2011 will likely be resolved through cuts in aid andtransers to many local governments;

nwo o the actors that city nance ocers report as having the largest negative impact on their ability to meetneeds are employee-related costs or health care coverage and pensions. Underunded pension and health careliabilities will persist as a challenge to city budgets or years to come; and

n

Facing revenue and spending pressures, cities are likely to continue to make cuts in personnel and services, andto draw down ending balances in order to balance budgets.

Conronted with these issues, 80 percent o city nance ocers orecast that their cities will be less able to meet needs in 2011 thanthey were in 2010.

We oten reer to the lag between changes in the economiccycle and the impact on city scal conditions. What does

this mean? Te lag reers to the gap between when eco-nomic conditions change and when those conditions havean impact on reported city revenue collections.

How long is the lag? Te lag is typically anywhere romeighteen months to several years, and it is related in largepart to the lag in property tax collections. Property taxbills represent the value o the property in some previous

year, when the last assessment o the value o the prop-erty was conducted. A downturn in real estate prices maynot be noticed or one to several years ater the downturnbegan, because property tax assessment cycles vary across

jurisdictions: some reassess property annually, while others

reassess every ew years. Consequently, property tax col-lections, as reected in property tax assessments, lag eco-nomic changes (both positive and negative) by some periodo time. Sales and income tax collections also exhibit lagsdue to collection and administration issues.

Figure 2 (pg. 3), which shows year-to-year change in citygeneral und revenues and expenditures, also includesmarkers or the ocial U.S. recessions that occurred in

1991 and 2001, with low points, or troughs in March1991 and November 2001 according to the National Bu-

reau o Economic Research (NBER). Comparing the dateso the recessions to the low point o city revenue and ex-penditures as reported in NLCs annual survey (typicallyconducted between April and June o every year), we seethat the low point or city revenues and expenditures a-ter the 1991 recession occurred in 1993, approximatelytwo years ater the trough o the U.S. economic recession(March 1991 to March 1993). Ater the 2001 recession,the low point or city revenues and expenditures occurredin 2003, approximately eighteen months ater the trough othe U.S. economic recession (November 2001-April 2003).Our reporting on this lag is dependent upon when the an-nual NLC survey is conducted, meaning that there is some

degree o error in the length o the lag or instance, hadthe survey been conducted in November o 1992, ratherthan April o 1993, we might have picked the efects ochanging economic conditions earlier. Nevertheless, ourpoint, that the evidence o the efects o changing econom-ic conditions tend to take 18-24 months to become ev ident,is borne out by the available data.

th la Btwn conoMc & cty Fscal condtons


8/8


1301 Pennsylvania Avenue, NW | uite 550 | Washington, D.. 20004 | www.nlc.org

National League of ities 2010

aBout th suRvyTe City Fiscal Conditions Survey is a national mail survey o nance ocers in U.S. cities. Surveys were mailed to a sample o 1,055cities, including all cities with populations greater than 50,000 and, using established sampling techniques, to a randomly generatedsample o cities with populations between 10,000 and 50,000. Te survey was conducted rom April to June 2010. Te 2010 surveydata are drawn rom 338 responding cities, or a response rate o 32.0%. Te responses received allow us to generalize about all cities

with populations o 10,000 or more.Troughout the report, the data are compared or cities o diferent population sizes, regions o the country, and with diferent taxstructures. Te response rates or these categories are provided in the table below.

CATEGORIES NUMBER OF SURVEYS SENT NUMBER RETURNED RESPONSE RATE

populaton

>300,000 59 31 52.5%

100,000-299,999 179 63 35.2%

50,000-99,999 315 97 30.8%

10,000-49,999 502 147 29.3%

Ron

Northeast 222 21 9.5%

Midwest 302 77 25.5%

South 277 118 42.6%

West 254 122 48.0%

tax authoRty

Property 384 81 21.1%

Sales & Property 534 236 44.2%

Income & Property 110 21 19.1%

It should be remembered that the number and scope o governmental unctions inuence both revenues and expenditures. For examplemany Northeastern cities are responsible not only or general government unctions but also or public education. Some cities arerequired by their states to assume more social welare responsibilities than other cities. Some assume traditional county unctions.Cities also vary according to their revenue-generating authority. Some states, notably Kentucky, Michigan, Ohio and Pennsylvaniaallow their cities to tax earnings and income. Other cities, notably those in Colorado, Louisiana, New Mexico, and Oklahomadepend heavily on sales tax revenues. Moreover, state laws may require cities to account or unds in a manner that varies rom stateto state. Tereore, much o the statistical data presented here must also be understood within the context o cross-state variation intax authority, unctional responsibility, and state laws. City taxing authority, unctional responsibility, and accounting systems varyacross the states. For more inormation on diferences in state-local scal structure, see Cities and State Fiscal Structure (NLC 2009)at www.nlc.org.

When we report on scal data such as general und revenues and expenditures we are reerring to a ll responding cities aggregated scal

data included in the survey. As a consequence, it should be noted that those aggregate data are inuenced by the relatively larger citiesthat have larger budgets and that deliver ser vices to a preponderance o the nations cities residents. When asking or scal data, we askcity nance ocers to provide inormation about the scal year or which they have most recently closed the books (and thereore have

veried the nal numbers), which we generally reer to as FY 2009, the year prior (FY 2008), and the budgeted (estimated) amountsor the current scal year (FY 2010).

When we report on non-scal data (such as nance ocers assessment o their ability to meet scal needs, scal actions taken, oractors afecting their budgets), we are reerring to percentages o responses to a particular question on a one-response-per-city basis

Tus, the contribution o each citys response to these questions is weighted equally.

Documents

City Trends