Cities’ Financial Outlook Improves in 2013

City finance officers were better able to meet financial needs in 2013 than in 2012 and, despite national economic indicators pointing to continued slow growth, improved conditions for city budgets are projected for 2014 and beyond. These are among the findings in the National League of Cities annual survey on city fiscal conditions. Sales and income taxes seem to be a bright spot for cities. In 2012, city sales tax receipts increased over previous year receipts by 6.2 percent, similar to growth levels seen prior to the recession. City finance officers also reported year-over-year growth of 4.4 percent for 2012 in income taxes and are projecting growth of 2.3 percent for 2013. The report's authors warn that city fiscal conditions remain vulnerable to external policy shifts, including cuts in federal spending. Additionally, pension and health care costs continue to be a drag on municipal budgets. Read the report.