Cities’ Health Improving

By Heather Williams and Will Higgins

This morning, the National League of Cities (NLC) released its 28th annual City Fiscal Conditions report.

The news is promising. The overall health of cities is improving. Seventy-two percent of city Chief Financial Officers surveyed reported that their cities are better able to meet financial needs in 2013 than in 2012. However, a number of factors, including the lack of progress on the federal budget and debt ceiling, continue to remain a threat. As NLC executive director Clarence Anthony said “Cities are stuck between the White House and Congress”.

The improving health of our nation’s cities is a direct result of tough decisions being made by city officials. The health of city general funds suggests that revenues are picking up and ending balances have stopped declining. In order to get there, city officials have had to take action. Decisions to increase fees and cut personnel have been and continue to be made across the country.

It is important to note that cities did not immediately feel the impact of the national recession. One of the largest major revenue sources is property taxes, which causes a natural lag between what is happening to the national economy and the time the effects of the economy impact the fiscal health of cities.

Moving forward, cities are projected to see little growth. While the overall health of the cities is improving, many challenges still exist. Property tax revenue is still declining and cities are facing health and pension benefit liabilities and infrastructure demands. These issues, among others, are continuing to strain city budgets.

Unfortunately, the health of city fiscal conditions are impacted by the action taken by–or if things continue the way they are right now, the inaction of–Congress on issues such as municipal bonds and cuts to spending.

The full City Fiscal Conditions report can be found at the following link: http://www.nlc.org/Documents/Find%20City%20Solutions/Research%20Innovation/Finance/Final_CFC2013.pdf

***

Heather Williams works at Stateside Associates to help clients manage state and local government issues. As Vice President at the company she also manages client relationships with key Groups, including her “alma mater,” the Democratic Legislative Campaign Committee (DLCC), where she served as National Finance Director.

Will Higgins is Manager, Local Government Services at Stateside Associates. Prior to joining Stateside Associates as a Legislative Associate, Mr. Higgins worked for the Florida House of Representatives, as well as for a United States Senator. He also worked for several public affairs and communications firms supporting campaigns at the local, state and national levels.

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