Cities across the country are experiencing minimal financial growth for the second consecutive year, according to the National League of Cities’ (NLC) annual City Fiscal Conditions report.
Researchers found that General Fund revenues are slowing, having only grown by 2.61% in 2016. Revenues are projected to remain relatively stagnant in 2017 with 0.9% growth. Similarly, expenditures grew by 2.18% in 2016, and are predicted to increase by 2.1% in 2017.
The NLC survey reported that cities’ General Fund revenues have still not yet fully recovered from the 2006 recession and remain at less than 98% of that year’s levels.
Additionally, factors that represent costs to cities, mainly employee wages and infrastructure needs, have increased more than any other factor. Meanwhile, revenue factors, primarily federal and state aid, have decreased the most broadly.
"Our findings raise cautionary flags, despite improvements in economic indicators, like productivity and unemployment,” Christiana McFarland, director of research for the NLC, said in a statement. “These countervailing trends point to the imperative to expand the fiscal tools available to cities."
Researchers noted that these findings, along with others in the survey including a lack of confidence from city finance officers, signal a trend that was previously seen in 2006 before the Great Recession.