NLC fiscal report indicates slowdown in city revenue growth

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A research report released Sept. 12 by the National League of Cities indicates a potential slowdown in the municipal finance sector across the U.S. as city fiscal growth contracts for the second consecutive year.
 
Several major findings from the report, City Fiscal Conditions 2017, signal a trend that was last seen in 2006, before the Great Recession, including waning confidence of city finance officers, slowing local revenues, and insufficient post-recession revenue recovery.
 
City Fiscal Conditions, which has been published annually by NLC since 1986, provides a window into the health of cities across the country.
 
The following are some of the key findings:
 
• General fund revenues grew by 2.6 percent in 2016, and revenues are projected to stagnate, with just 0.9 percent growth in 2017.
• Property tax revenue growth is budgeted much lower than in 2016. Finance officers have budgeted for 1.6 percent growth in property tax revenues in 2017, compared to 4.3 percent in 2016.
• Confidence among municipal finance officers has waned. Although the majority of finance officers (69 percent) are confident in the fiscal position of their cities, widespread optimism hit its peak in 2015.
 
“Our findings raise cautionary flags, despite improvements in economic indicators, like productivity and unemployment,” said Christiana McFarland, research director at the National League of Cities. “These countervailing trends point to the imperative to expand the fiscal tools available to cities.”
 
NLC Executive Director and CEO Clarence Anthony added, “City leaders know that at the end of the day, they must balance their budgets to continue delivering the services their communities rely on. … It’s critical that Congress and the administration work closely with local officials to ensure American cities continue to grow our economy and lead our nation forward.”
 
To access the report, visit www.NLC.org/CFC.