–Property Tax collections Seen Down 3.7% This Year, More in 2012,13
WASHINGTON (MNI) – The following are excerpts from the National
League of Cities annual report on municipal fiscal conditions around the
country, published Tuesday:
Cities Cut Jobs and Infrastructure as Finances Continue to Weaken
The nation’s cities are cutting personnel and infrastructure
projects as the economic downturn continues to take its toll on city
finances according to the National League of Cities’ annual
City Fiscal Conditions report.
The report reveals that general city revenues are continuing to
fall, with a projected -2.3% decrease by the end of 2011. This is the
fifth straight year of declines in revenue with probable further
declines in 2012.
The revenue decline is mainly due to the suppressed property market
that is negatively impacting property tax revenue. Property tax
collections are expected to decline by -3.7% with further declines
likely in 2012 and 2013.
Income tax receipts are also experiencing a decrease of -1.6%.
Sales tax receipts remained largely flat, but this is at last year’s
level which saw the worst decrease in sales tax revenue in 15 years.
Cities are responding by cutting personnel (72%), delaying
infrastructure projects (60%) and increasing service fees (41%). One in
three (36%) cities report modifications to employee health care
benefits.
—
Cities have also been forced to contend with significant decreases
in state aid, adding to the pressures facing cities. Since 2009, cities
report cuts in general aid (50%), shared revenues (49%), and reductions
in reimbursements and other transfers (32%). As states make these cuts
to balance their budgets, it puts greater budgetary pressure on local
governments that must balance their budgets as well.
Confronted with revenue shortfalls, budget cuts, and state aid
cuts, 57% of city finance officers report that their cities are less
able to meet financial needs in 2011 than in 2010.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MAUDS$]
