Category Archives: Cities & Towns

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
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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.

Older industrial cities are key to addressing rising regional inequality

Source: Alan Berube and Cecile Murray, Brookings Institution, April 23, 2018

The United States is about to enter its 10th year of economic expansion, dating back to the end of the Great Recession in June 2009. Job growth is robust, the unemployment rate is low, and median household income is at an all-time high.

Yet there remains a strong sense, punctuated by the results of the 2016 presidential election, that many parts of the country have been left behind in the rising tide.

Regional inequality is on the rise
The evidence backs this up. Almost four in five urban areas nationwide had household incomes in 2016 at least 5 percent lower than their levels in 1999. Many of the hardest-hit communities were small to mid-sized areas throughout the Midwest, Northeast, and Southeast still feeling the effects of long-run industrial decline…..

Big or Small Cities? On city size and economic growth

Source: Susanne A. Frick, Andrés Rodríguez‐Pose, Growth and Change: A Journal of Urban and Regional Policy, Volume 49, Issue 1, March 2018

From the abstract:
Policy makers and academics frequently emphasize a positive link between city size and economic growth. The empirical literature on the relationship, however, is scarce and uses rough indicators for the size of a country’s cities, while ignoring factors that are increasingly considered to shape this relationship. In this paper, we employ a panel of 113 countries between 1980 and 2010 to explore whether 1) there are certain city sizes that are growth enhancing and 2) how additional factors highlighted in the literature impact the city size/growth relationship. The results suggest a nonlinear relationship which is dependent on the country’s size. In contrast to the prevailing view that large cities are growth‐inducing, for a majority of countries relatively small cities of up to 3 million inhabitants are more conducive to economic growth. A large share of the urban population in cities of more than 10 million inhabitants is only growth promoting in countries with an urban population of 28.5 million and more. In addition, the relationship is highly context‐dependent: a high share of industries that benefit from agglomeration economies, a well‐developed urban infrastructure, and an adequate level of governance effectiveness allow countries to take advantage of agglomeration benefits from larger cities.

Detroit’s bond redemption a credit positive step toward addressing rising fixed costs

Source: David Levett, Rachel Cortez, Alexandra S. Parker, Moody’s, Issuer Comment, March 21, 2018
(subscription required)

The retirement of $52 million of principal and $2 million of interest on its financial recovery bonds is the latest example of the city’s effort to strengthen its financial position as it prepares for a $140 million increase in pension contributions in fiscal 2024.

10 Most Expensive U.S. Cities to Live In

Source: Dan Burrows, Kiplinger, March 19, 2018

The most expensive U.S. cities are usually expensive for a reason. Residents pay higher living costs in exchange for favorable geography, climate, culture or economic prosperity — or all of the above. Of course, that doesn’t make the most expensive cities the “best” cities to live in, at least not for everyone, says Jennie Allison of the Center for Regional Economic Competitiveness, a nonprofit research and policy group. …. To determine just how much the most expensive U.S. cities cost, we turned to the latest data from the Council for Community and Economic Research. Its Cost of Living Index measures prices in 269 urban areas for housing, groceries, utilities, transportation, health care, and miscellaneous goods and services such as getting your hair done or going to a movie. Take a closer look at the 10 most expensive U.S. cities.

Domestic Migration and Fewer Births Reshaping America

Source: Kenneth M. Johnson, Carsey School of Public Policy at the University of New Hampshire, National Fact Sheet #38, Spring 2018

From the summary:
New Census Bureau data released on March 22, 2018, demonstrate the continuing influence of domestic migration on U.S. demographic trends. Migration patterns are reverting to those common before the recession. Suburban counties of large metropolitan areas, smaller metropolitan areas, and rural counties proximate to metropolitan areas all gained more domestic migrants in the last year. In contrast, domestic migration losses grew in the core counties of metropolitan areas of 1 million or more and remained substantial in rural counties that are not adjacent to an urban area.

Key findings:
– Domestic migration losses from large urban cores rose sharply.
– Domestic migration gains are accelerating in other metro areas.
– Population growth has resumed in rural areas.
– More people are dying, but births remain low.

State capitals not immune from fiscal trouble, though ‘next Hartford’ unlikely

Source: Chris Salcedo, Naomi Richman, Alexandra S. Parker, Leonard Jones, Moody’s, Sector In-Depth, February 28, 2018
(subscription required)

The recent financial struggles of Hartford, Connecticut show that a city’s status as a state capital is not a buffer against credit distress. A sizable government sector provides stability, but it is not a reliable growth driver.