A new report from the National League of Cities suggests urban areas will face diminished revenues through 2011 and beyond.
The vast majority of city finance officers reported worse financial conditions in 2010 than 2009, even as some sectors of the nation's economy have seen improvement. City revenues from property, sales and income taxes decline by 3.2%, a trend accounted for in part by decreases in housing prices.
To combat revenue loss, cities have cut spending by an average of 2.3%. Commonly employed cost-saving measures include laying off workers (79% of cities surveyed), delaying and canceling capital projects (69%), reducing health benefits (34%) and making across-the-board service cuts (25%).
Christopher Hoene, co-author of the report and director of the Center for Research and Innovation for the National League of Cities, cautions that the problem may be long-term:
'These stark numbers continue the trend we've been seeing for the past several years: lower revenue and reduced services at a time when there is an increased demand for services. Unfortunately, because of the loss in revenue, cities will face even more difficult circumstances in the months, if not years, to come.'
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