March 2011 Municipal Cost Index shows rise in prices

The costs of goods and services purchased by local governments increased 0.7 percent over last month, according to American City & County’s Municipal Cost Index. The March 2011 Municipal Cost Index value of 217.4 is 3.5 percent higher than last year.

Of the items local governments commonly use, iron and steel scrap, diesel fuel and gasoline showed the largest price increases in the last month. Iron and steel scrap prices increased 13.6 percent, diesel fuel prices increased 7.2 percent, and gasoline prices increased 6.9 percent. In the last year, iron and steel scrap prices have increased 35.6 percent, which is the highest percentage increase among items tracked by American City & County. Natural gas has shown the largest percentage decrease in prices (-29.7 percent) from last year.

The Municipal Cost Index, developed exclusively by American City & County, is designed to show the effects of inflation on the cost of providing municipal services. State and local government officials rely on American City & County’s Municipal Cost Index to stay on top of price trends, help control price increases for commodities, make informed government contract decisions and intelligent budget planning. Since 1978, readers have loyally referred to the Municipal Cost Index to determine the cost of inflation and, hence, the rising cost of doing business as a local government.

American City & County’s Municipal Cost Index for March 2011 is available now at www.americancityandcounty.com/mciarchive. For a complete archive of the index since 1978, visit www.americancityandcounty.com/mciarchive.