U.S. city revenues recover with help from states: Pew

WASHINGTON Mon Nov 11, 2013 5:05pm EST

General view of the city of Pittsburgh, Pennsylvania April 8, 2011. REUTERS/Eric Thayer

General view of the city of Pittsburgh, Pennsylvania April 8, 2011.

Credit: Reuters/Eric Thayer

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WASHINGTON (Reuters) - Cities are getting big revenue boosts from U.S. states, leading some municipal budgets to recover from the 2007-09 recession, Pew Charitable Trusts found in an analysis of financial reports for the 30 most-populated cities released on Monday.

A time lag in assessing property taxes, the largest revenue source for cities, caused the recession to hit local budgets later than state and federal ones and prolonged the economic pain. Through 2011 cities continued to cut services, tap reserves, shrink pension contributions and raise taxes, Pew found.

Still by fiscal 2011, which for most cities ended on June 30, 2012, the revenues of nine cities reached their pre-recession peaks. Two were in Texas: San Antonio and Dallas. Revenues for Washington, D.C., Atlanta, San Francisco, Pittsburgh, St. Louis and Chicago also had recovered.

Portland, Oregon had the highest level, with revenues near 110 percent of the pre-recession peak, Pew found.

"In each, aid from other governments was the first- or second-largest contributor of growth as city revenue recovered," Pew found. "This group of cities typically got larger increases in intergovernmental aid and received infusions from states and the federal government later...than did the other 21 cities."

Revenues were approaching pre-recession levels in five other cities by 2011, the last fiscal year full data was available: Baltimore, Cincinnati, Denver, New York, Philadelphia.

(Reporting by Lisa Lambert; Editing by Leslie Gevirtz)

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Comments (1)
morbas wrote:
The set of the 30 cities studied required State and Federal aid, AND increased taxes (more revenue). City revenue base cannot include income taxation, thus it taxes the entire population at a flat rate. Thus the poor must sacrifice sustenance while the well to do skate above this gregarious burden.

Byzantine hammer of State and Local budgets is unfair revenue burdening of the lower 4/5th quintile ‘per capita’ incomes. Taxation at State and Local levels is less progressive than federal, which burdens the lowest income levels with the highest effective rate; and the upper 2 percent with the lowest effective rate. And State trends for greater Local budgets aggravates burdening of the poor. Municipalities borrow more in a recession, as the lower quintile’ wages are more diminished. Revenue burden falls on the true employment engines the entrepreneurial small business, and thus all consumers.

Nov 11, 2013 5:51pm EST  --  Report as abuse
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