Cities report on fiscal conditions.

• Position: NEWS & NUMBERS

The fiscal condition of U.S. cities continues to weaken, according the National League of Cities' 2010 survey of city finance officers. In response to struggling housing markets, slow consumer spending, and high levels of unemployment, the survey found that cities are cutting employees, infrastructure investments, and services. Of finance officers responding to the survey, 87 percent said their cities have been less able to meet fiscal needs in 2010 than in 2009. Finance officers in cities that rely on property taxes and sales taxes--the two most common local tax sources--were equally likely to report that their cities had been less able to meet fiscal needs in 2010 than they were last year. The survey's findings are summarized below.

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Respondents reported declining revenues and spending cutbacks, with revenues down for the fourth year in row. The report goes on to say that city budgets tend to lag economic conditions by 18 months to several years, suggesting more revenue declines and cuts in city spending in 2011. Property tax collections lag the real estate market because local assessment practices take time to catch up with changes in the market, and property tax revenues for 2010 reveal the first constant dollar decline (-1.8 percent) after years of annual growth. Property tax revenues will likely decline further in 2011 and 2012, according to the report.

When asked about their responses to shortfalls in this fiscal year, the most common answer respondents gave was personnel...