A new report from the National League of Cities says worse times lie ahead for U.S. cities, which will collect less revenue this year, The New York Times reports.
"For cities, the collective impact of property values continuing at levels far below their 2007 peaks, consumer spending slowing, consumer confidence eroding and markets possibly entering a double-dip recession is the worst since the Great Depression."
The report said that 57 percent of municipal officials say finances were worse in fiscal 2011 than in 2010.
Inflation-adjusted revenue is headed for a fifth-straight annual drop, while worker healthcare and pension costs rose for more than 80 percent. Half of the municipal officials said state aid has declined.
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According to the report, nearly a third of U.S. cities are laying off workers this year, more than half have canceled or delayed infrastructure projects, and two out of five have raised their fees.
The report raises the possibility that "lower property values and declining sales may portend something entirely new, a 'new normal.'"
Property tax revenues, upon which many cities and local governments rely heavily, are usually quite resilient, are projected to fall by 3.7 percent this year — their second year in a row of declines.
Bloomberg Business Week reports that through Sept. 22, about $1.18 billion of municipal debt entered default this year, compared with almost $3.61 billion for 2010.
On the whole, cities are paying their bills and balancing their budgets by eliminating jobs, canceling projects and charging more for services.
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