U.S. Mayors' Survey Shows Main Street America Still in Recession; Cities in Dire Need of Jobs

U.S. Mayors' Survey Shows Main Street America Still in Recession; Cities in
Dire Need of Jobs

Budget Shortfalls in Most Cities Bad This Year; Worse Next Year

WASHINGTON, Nov. 6 /PRNewswire-USNewswire/ -- In the face of current and
projected future budget shortfalls, The U.S. Conference of Mayors today
released a survey that shows the economic condition in cities is now serious
enough to warrant targeted federal support. In fact, sixty percent of 158
mayors surveyed in 41 states and Puerto Rico say a targeted program of fiscal
assistance is needed to help prevent further drastic budget cuts that
translate into losses of personnel and reductions in public services (full
survey at
www.usmayors.org/pressreleases/uploads/SurveyonCityFiscalConditions11709.pdf).

In cities ranging from Los Angeles and Chicago, to Lima (OH) and Gastonia
(NC), two out of three mayors are expecting budget shortfalls this year. Even
more - four out of five - are projecting shortfalls in their next fiscal year.
In nearly 27 percent of the surveyed cities, this year's budget shortfalls
amount to 10 percent or more of total (operating and capital) budgets; in a
few of the cities the shortfalls range from as much as 20 to 30 percent of
total budgets.

When asked about next year, the vast majority of mayors (86 percent of survey
respondents) say projected shortfalls will be the same or larger than this
year's. Of these, 39 percent expect it will be larger, and 22 percent expect
it will be much larger.

More than half of the mayors say that their local budget situation has
affected their ability to engage in job-creating projects, despite the funding
provided through the American Recovery and Reinvestment Act (ARRA) -- the
economic stimulus legislation enacted in February.

The vast majority of mayors (more than 86 percent) reported that they had
received some funds directly to their cities through the ARRA and had already
been authorized to begin work using funds provided. The question of whether
ARRA funding to create jobs would go directly to cities rather than through
states was a contentious issue during the drafting of the legislation.
Further, a USCM report tracking transportation stimulus dollars revealed that
cities and metropolitan areas were often shortchanged by state Departments of
Transportation when it came to dolling out ARRA funds and often received far
less funds than they deserve given their dominate role in the national economy
and respective state economies (www.usmayors.org).

"Mayors know that once ARRA is fully implemented, millions of jobs will be
saved or created and lasting benefits will be realized. But they also know
that the American people are demanding that we save or create more jobs NOW,"
said USCM CEO and Executive Director Tom Cochran. "It is clear that when
stimulus funds go directly to cities, they are put to work immediately and
there is no delay in spending."

Reporting on areas in which additional federal fiscal assistance could be most
effective in creating jobs and meeting local needs, more than nine out of 10
mayors cited local transportation projects, more than eight out of 10 cited
community and economic development projects, and more than seven out of 10
cited sewer and water projects.

U.S. mayors are concerned that unemployment numbers in cities are staggering -
well beyond national unemployment figures - and continue to grow: 13.9 percent
in Long Beach, California; 13.4 percent in Las Vegas, Nevada; 19.4 percent in
National City, California; 14.9 percent in Providence, Rhode Island; 11.5
percent in St. Louis, Missouri; and 10.9 percent in Cleveland, Ohio for
example.

"Wall Street may be in recovery, but Main Street America is still hurting.
Many economists are saying we are coming out of the recession, but we are
concerned that we are in a jobless recession with many cities experiencing
double-digit unemployment numbers. Hence we must work with Congress and the
White House on a response now," said USCM CEO and Executive Director Tom
Cochran.

The U.S. Conference of Mayors is the official nonpartisan organization of
cities with populations of 30,000 or more. There are 1,139 such cities in the
country today, each represented in the Conference by its chief elected
official, the Mayor.

What Is Happening Now in Cities/Metro Areas

In an effort to better understand the employment and city budget crises faced
by cities today, the Conference of Mayors is conducting a brief survey of
America's mayors. To date 148 cities ranging in size from Los Angeles and
Chicago to those having populations fewer than 10,000 have responded. These
cities are spread across 41 states and Puerto Rico. Their responses take us
beyond anecdotal information to show the extent to which so many of our cities
are sharing the same problems and experiences, and identifying the same needs
for assistance to help restore their solvency and put their residents back to
work.

-- The three employment sectors most often identified by mayors as
experiencing the highest levels of unemployment are construction (by
75
percent), manufacturing (by 55 percent), and retail (by 44 percent).
-- Two-thirds of the cities (67 percent) project that they will
experience
a budget shortfall in the current fiscal year.
-- Most often cited as the local causes of the expected shortfalls are
decline in anticipated sales tax revenue (by 72.5 percent), decline in
anticipated service fees (by 54 percent), and decline in anticipated
property tax revenues (by 37 percent).
-- Nearly three-fourths of the mayors (73.5 percent) report that cuts in
state funding to their cities (either grants or passed-through
revenues)
have contributed to their budget shortfalls.
-- Actions most often being taken to avoid budget shortfalls this year
include postponing projects or initiatives (by 81 percent),
eliminating
city positions through attrition (by 75 percent), and reducing
purchasing and procurement (by 73 percent).
-- More than four in five mayors responding (81 percent) anticipate a
budget shortfall in their next fiscal year.
-- Of these mayors, 40 percent expect that next year's shortfall will be
larger than the current year's; 21.5 percent expect it to be much
larger. Twenty-four percent of the mayors expect it will be about the
same. Fourteen percent expect the shortfall will be smaller, and only
one of the cities expects it will be much smaller.
-- Half of the mayors report that their budget situation has affected
their
ability to engage in job-creating projects.
-- The vast majority of mayors (88 percent) report that they have been
authorized to begin work using ARRA funds provided directly to their
cities, and/or they have received the direct ARRA funding so that work
could begin and workers could be hired.
-- Nearly four in five of these cities (78 percent) have received direct
funding through the Community Development Block Grant; 69 percent have
received it through the Byrne Justice Assistance Grant; about the same
(68.5) percent received it through the Energy Efficiency and
Conservation Block Grant. Forty-six percent received COPS hiring
grants.
-- Mayors say that additional federal assistance can be most effective in
creating jobs and meeting local needs if it is focused on local
transportation projects such as transit, roads, and bridges (90.5
percent of the mayors cite this), community and economic development
(84.4 percent cite this), water and sewer projects (71 percent cite
this), energy and environmental projects (67 percent cite this), and
public safety personnel (56 percent cite this).

-- Most mayors (61 percent) believe that conditions in their cities are
serious enough that a program of targeted fiscal assistance is
warranted
to help prevent further drastic city budget reductions.

SOURCE U.S. Conference of Mayors

Elena Temple, +1-202-861-6719, etemple@usmayors.org, or Carlos Vogel,
+1-202-257-9797, cvogel@usmayors.org, both of U.S. Conference of Mayors