Cities recovering from recession.

• Position: News & Numbers

U.S. cities continue to feel the effects of the Great Recession, and policymakers continue to face difficult fiscal conditions that will continue for years. Thirty large U.S. cities studied by the Pew Charitable Trusts have recovered slowly from the Great Recession, using a variety of tools to navigate the economic downturn, according to new paper titled America's Big Cities In Volatile Times: Meeting Fiscal Challenges and Preparing for the Future. This is especially good news, given the outsized impact cities have on the economies and long-term prosperity of their states and the nation as a whole.

Specific experiences differed for each of the cities studied, but most felt the effects of the recession approximately one year later than the federal and state governments. Relatively strong property tax collections helped defer the recession's fiscal impact, but these revenues began to falter in 2010. Declining property tax collections, compounded by increasingly unpredictable aid from the federal and state governments (which are dealing with their own budgetary constraints), suggest a difficult path forward.

Cities have dealt with these fiscal challenges in several ways, such as dipping into reserve funds, cutting spending, and increasing revenues from tax and nontax sources. For example, halfway through fiscal 2009, New York City reversed a 7 percent property tax cut and eliminated a homeowner rebate program, which boosted revenues and contributed $2.3 billion to property tax growth. Using a different strategy, the City of Sacramento, California, tapped its reserves during and after the Great Recession to help...