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New Report Finds Improving City Fiscal Outlook, But Pension & Healthcare Costs Loom

Leonard Gilroy
October 14, 2013, 4:18pm

After six straight years of declining general fund revenues, a new report from the National League of Cities finds that American cities are projecting a slight increase in general fund revenues in 2013. While property tax revenues are expected to continue their multi-year slide this year, sales and local income taxes are up. Further, two in five (39%) cities raised fee levels for various services, while 22% of cities increased the number of fees applied to city services, and 19% of cities increased local property taxes in 2013.

Still, there are significant fiscal headwinds. The NLC report notes, "While conditions are no longer deteriorating, the capacity of city budgets remains weakened coming out of the Great Recession." According to the report, factors putting pressure on city budgets include infrastructure costs; public safety costs; employee-related costs for health care, pensions, and wages; and cuts in state and federal aid.

Some other interesting findings of the report include:

The full report is available here.

Given the current and future pension funding cost challenges cited in the report, city leaders interested in reforming their pension systems in the interest of fiscal sustainability should consider signing up for Reason's two remaining (and free) Pension Reform Webinars this Wednesday and next Tuesday. More details and registration info are available here

Leonard Gilroy is Senior Managing Director, Pension Integrity Project &
Director of Government Reform

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