US cities report healthier fiscal outlook

Cities in the US are more optimistic about the direction of their fiscal conditions for the first time since the global financial crisis, according to a new survey.

The National League of Cities surveyed 354 cities across the US and report that 80 percent of city finance officers feel better able to meet fiscal needs than last year. The survey also outlines that city revenues are showing the first signs of growth in five years, with some municipalities hiring more workers.

“Cities are in a better fiscal position and are starting to reinvest in areas that took big cuts during the recession, including the workforce, infrastructure and public safety,” Christiana McFarland, Research Director at the League, told Cities Today.

Despite increased revenues this year, the forecast is for this to flatten in 2015, yet property tax, a major source of revenue for US local governments, will rise by 1.6 percent–the first increase in five years.

“Revenue projections for the next year continue to show slow growth that remains susceptible to outside budget pressures,” warned McFarland. “Cities have not reached full recovery and with uncertainty and lacklustre economic growth, they continue to build their ending balances to ensure financial cushions.”

Underlying challenges still prevail that are restricting cities’ recovery. The League is attempting to tackle these by pushing for a municipal bond tax-exempt status, increasing infrastructure investment from the federal government, and by helping cities strengthen their local economies by supporting the growth of small businesses and entrepreneurship.

The annual survey is the 29th edition that is produced in partnership with the University of Illinois at Chicago’s College of Urban Planning and Public Affairs. City finance officers were surveyed from all cities above a population of 50,000 and a random sample between populations of 10,000 and 50,000.