NLC report: Budget shortfalls could cost more jobs
Most cities and towns are facing worsening economic conditions that are forcing layoffs and reductions in city services, according to a new report from the Washington-based National League of Cities (NLC). NLC officials say Congress should respond to the crisis by passing the Local Jobs for America Act (LJAA), which would provide $100 billion over several years to local communities to hold off planned cuts or to hire back workers for local services who have been laid-off because of tight budgets.
NLC’s report, “The State of American Cities Survey on Jobs and the Economy,” found that 7 in 10 city officials are responding to the economic crisis by making personnel cuts, including layoffs, hiring freezes and furloughs. In addition, 68 percent of cities in the report are cutting capital projects, and 22 percent of city officials indicate they are cutting public safety budgets, which is typically an option of last resort.
Looking forward, more than half of all respondents say they anticipate that next year will see even greater cuts in city services if taxes or fees are not raised. City budget shortfalls are predicted to become more severe as tax collections, which lag the overall economy, catch up with economic conditions. More than 80 percent of respondents cite the commercial property market as a foremost concern. As a major contributor of local revenue, the resulting loss of property taxes could act as a significant barrier to local economies’ ability to recover.
The service and employment cuts are coming at a time when cities are seeing record increases in poverty, the respondents say in the report. Sixty-three percent say that poverty has increased in their community in the last year, the largest percentage since the question was asked in 1992.
The continuing cuts demonstrate a clear need for the LJAA, according to an NLC statement. “[LJAA] will lay a foundation for future growth as cities will be given funds to innovate and create useful jobs in both municipal and nonprofit agencies,” NLC says in the statement.
Download The State of American Cities report.