Three out of four city finance directors report that their cities are better able to meet their financial needs in 2013 than in 2012, according to the annual “City Fiscal Conditions ” report released by the National League of Cities (NLC).  “American cities are leading this economy,” said NLC Executive Director Clarence Anthony at the October 10 news conference releasing the survey results.  

Anthony cautioned that there are threats to the economic recovery.  “What is going on in Congress will have an impact on what goes on in cities,” he said.  “We are stuck between the White House and Congress.  We want support for economic growth in American cities.”

The report found that cities that rely heavily on sales taxes are faring better than those dependent on property tax revenue.  As the housing market has begun to rebound, property tax revenues have stabilized and are expected to improve over time.

Fewer cities have had to continue hiring freezes, layoffs, and salary freezes in 2013 compared with 2012.  At the same time, cities have ongoing challenges in funding their infrastructure needs and in addressing their health and retirement benefit costs.

“While conditions are improving, city budget capacity remains limited with revenue and expenditure projections pointing to a continued slow recovery,” according to the report.