Category Archives: Cities & Towns

City Fiscal Conditions 2019

Source: National League of Cities, October 2019

From the summary:
This year’s City Fiscal Conditions research looked at the fiscal conditions and factors across 500+ U.S. cities.

Some key takeaways:
– Almost two in three finance officers in large cities are predicting a recession as soon as 2020
– Cities’ revenue growth stalled in the 2018 fiscal year, but this year’s continued drop indicates mounting pressures on city budgets
– The Midwest is bearing the brunt of declining conditions, the report found. Overall general fund revenues in midwestern cities dipped by 4.4% in fiscal year 2018

What New Orleans Can Teach Other Cities About Reducing Homelessness

Source: Teresa Wiltz, Stateline, October 15, 2019

….After Katrina, homelessness skyrocketed, from about 2,000 people experiencing homelessness in 2005 to nearly 12,000 in 2007, according to Unity of Greater New Orleans (Unity GNO), a nonprofit designated by the federal government to lead the city’s efforts to provide housing and services to the homeless.

But in 2011, the city launched an all-out offensive on homelessness, slashing the number of homeless residents by more than 80%, from close to 6,700 in 2011 to fewer than 1,200 in 2018. Factoring in the city’s efforts to reduce homelessness since 2007, the overall number has been slashed 90%…..

….City officials did it by fighting homelessness on a variety of fronts: They adopted a “housing first” policy: providing homes and services to New Orleans’ neediest, without requiring that they resolve mental health or substance abuse issues first. They expanded a health care clinic for the homeless and started conducting weekly check-ins to connect more people to counseling and other services.

They designated 200 housing vouchers for veterans and set aside 55 units for them in a converted convent. They successfully lobbied Congress for 3,000 extra housing vouchers in 2008. And last year, the city opened a 100-bed, “low-barrier” shelter where people don’t have to be sober to be admitted.

In tackling the problem, the city relied almost exclusively on federal funds, according to Andreanecia Morris, executive director of HousingNOLA, a partnership of city officials, homeless advocates and dozens of nonprofits and public and private organizations…..

Investigating Sales Tax Revenue Competition Among Principal Cities and Their Neighboring Cities in Texas

Source: Michael Overton & Julius Nukpezah, International Journal of Public Administration, Latest Articles, September 9, 2019

From the abstract:
While research has explored the economic importance of principal cities on regional economies, little is known about the short-run and long-run dynamic relationships between principal cities and their neighboring cities as it pertains to their sales tax revenue elasticities and the subsequent affect this has on horizontal tax competition. Using vector error correction models on data from six principal cities in Texas, the findings of this study suggest that the relationship between principal and neighboring cities is highly dynamic and unique for each principal city. The study recommends that local economic policies should reflect these unique relationships.

Do Small Local Governments Fare Well? A Survey of Villages in New York

Source: Pengju Zhang, Marc Holzer, The American Review of Public Administration, OnlineFirst, July 25, 2019
(subscription required)

From the abstract:
Public administration studies have not adequately discussed governance challenges for small local governments. Given that more than 10% of villages have, unprecedentedly, voted on dissolution in New York over the past 10 years, this article exclusively and comprehensively investigates how well villages are faring in New York. Using a representative survey of village governments, coupled with a rich secondary data set, it finds institutional and political tensions between villages and their underlying town(s). It also suggests intergovernmental fiscal factors have threatened the organizational and fiscal health of some village governments. In addition, villages have extensively established service-sharing mechanisms with town(s) to mitigate fiscal stress. The majority of village officials remain skeptical about dissolution as an effective approach to cost savings.

Municipal Brief: New York City

Source: S&P Global Ratings, November 19, 2018
(subscription required)

The City of New York’s recently released 2018 comprehensive annual financial report confirms expected year-end results with those identified in the 2019 adopted budget. The audit presents a story of continued economic strength supporting strong revenue growth, outpacing higher-than-inflation expense growth, thereby supporting a slow-but-steady increase in the city’s reserves.

Municipal Equality Index – 2018

Source: Human Rights Campaign (HRC) Foundation, October 2018

From the press release:
Today, the Human Rights Campaign (HRC) Foundation, the educational arm of the nation’s largest lesbian, gay, bisexual, transgender and queer (LGBTQ) civil rights organization, in partnership with the Equality Federation Institute, announced that a record-setting 78 cities across the nation earned perfect scores in the seventh annual Municipal Equality Index (MEI), meeting the most demanding and pioneering criteria since the report’s debut in 2012. The MEI is the only nationwide rating system of LGBTQ inclusion in municipal law, policy and services.

The 2018 MEI evolved dramatically this year, instituting new benchmarks ensuring equal access to single-user facilities in public spaces, as well as protecting LGBTQ youth from bullying in city services and from dangerous so-called “conversion therapy.” Additionally, this year the MEI deducted points for laws that include provisions licensing discrimination against the LGBTQ community.

But even with these more stringent MEI requirements, cities and municipalities are meeting and exceeding our standards with innovative measures to protect LGBTQ people. A record 78 cities earned perfect scores for advancing LGBTQ-inclusive laws and policies — up from 68 in 2017 and 11 in 2012, the first year of the MEI. And in the current political reality, welcoming cities like these are more important than ever….

City Fiscal Conditions 2018

Source: Christiana McFarland, Michael A. Pagano, National League of Cities, 2018

From the summary:
The 2018 City Fiscal Conditions survey indicates that slightly more finance officers than last year are optimistic about the fiscal capacity of their cities. However, the level of optimism is still far below recent years. Furthermore, tax revenue growth is experiencing a year-over-year slowdown, with the growth in service costs and other expenditures outpacing it. Taken together, the survey results suggest that cities are approaching the limits of fiscal expansion.

– Finance officers from the smallest cities are least likely to report that their cities are better able to meet the fiscal needs of their communities this year over last (63%). Meanwhile, finance officers from cities in the South are most likely to report feeling confident this year (81%).

– General fund expenditures are outpacing revenues, a trend anticipated to continue into next year. Although revenues are not in decline, they grew only 1.25 percent in FY 2017, and are expected to stagnate in FY 2018. Expenditures grew 2.16 percent in FY 2017, with growth for FY 2018 budgeted at 1.97 percent.

– All major tax sources grew slower in FY 2017 than in FY 2016, and all are expected to grow less than one percent in FY 2018. In FY 2017:
– Property tax revenues grew 2.6 percent, compared to 4.3 percent in FY 2016
– Sales tax revenues grew 1.8 percent, compared to 3.7 percent in FY 2016
– Income tax revenues grew 1.3 percent, compared to 2.4 percent in FY 2016

– Cities continue to rely on the same revenue generating actions as they have in the past, namely increasing service fee prices (41%) and property tax rates (28%). This year, fewer cities are instituting new types of fees (18 percent this year versus 26 percent last year).

– Employee wages (88%), public safety (78%) and infrastructure (71%) are the most common areas for which cities increased spending. Fewer cities this year are contracting or privatizing city services and more are increasing spending on personnel and workforce expansion.

– By and large, it is too soon to tell specifically how provisions of the Federal Tax Cuts and Jobs Act of 2017 will impact city finances, except for advance refunding bonds. Thirty-five percent of city finance officers are already seeing negative fiscal impacts associated with the elimination of tax-exempt advance refunding bonds. Sixty one percent report that the loss of this fiscal tool will have negative impacts on future fiscal health.

These trends come at a time when cities have not yet regained losses from the Great Recession and face uncertainty from federal and state partners. Despite these challenges, cities continue to balance their budgets, remain resilient and serve as engines of national economic growth.

Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle

Source: Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary Wething, National Bureau of Economic Research, NBER Working Paper No. 23532, Issued in June 2017, Revised in May 2018
(subscription required)

From the abstract:
This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to as much as $11 in 2015 and to as much as $13 in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly wage rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by 6-7 percent, while hourly wages in such jobs increased by 3 percent. Consequently, total payroll for such jobs decreased, implying that the Ordinance lowered the amount paid to workers in low-wage jobs by an average of $74 per month per job in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.