Cities ‘fundamentally rethink’ services as recession lingers, survey finds

According to a new report on US cities’ fiscal condition, spending cuts and revenue losses sustained in the last year are at historic levels. And the National League of Cities’ yearly survey found that city finance officials cut expenditures by 2.3 percent – the largest in the survey’s 25-year history and the fourth straight year that revenue declined.

In their annual, “City Fiscal Conditions” survey, NLC found that 87 percent of cities report being worse off in 2010 than they were in 2009. And the report found that various measures are being taken to address declining revenues. Seventy-nine percent of cities have experienced forced layoffs, and 69 percent report delayed or canceled capital infrastructure projects. A quarter of cities report across-the-board cuts in services as well as another quarter making cuts to public safety – usually a measure of last resort, the report noted.

“This historic recession has forced city officials to make difficult decisions that impact the social and economic fabric of their communities,” Ronald Loveridge, mayor of Riverside, CA and president of NLC, said in a statement. “This recession is making city officials fundamentally rethink and repurpose the provision of services in their communities.”

Mr. Loveridge said while some cities were innovating, most officials are confronting continued financial stress and will likely have to continue cutting services without added resources.

The lagging housing market and associated housing assessments will ensure lasting pain for cities through 2011, the report says, and depending how quickly the national economic recovery is, cities may have several more rough years. Lowered consumer spending, higher unemployment rates and cuts in state aid have converged in a sustained manner that will make the climb harder, says Christopher Hoene, director of the Center for Research and Innovation for the National League of Cities.

“Unfortunately,” Mr. Hoene said, “because of the loss in revenue, cities will face even more difficult circumstances in the months, if not years, to come.”