Signs point to better fiscal conditions for local, state governments
There are glimmers of a turnaround in the finances of the nation’s local governments, after one of the most trying periods since the Great Depression of the 1930s. With the economy slowly moving ahead and a tentative firming in the real estate market, financial prospects are brightening, though tempered.
“We’re cautious about what the coming months hold,” says Christopher Hoene, director for research and innovation at the Washington-based National League of Cities and co-author of a September report on the fiscal condition of the nation’s cities. “We think the peak of the cutting was in 2011 and 2012. We hope that is so, but we’re watching from month to month.”
Left to its natural course, a growing economy, though struggling, might be sufficient to lift the revenue lines in local government. But the uncertainty in federal policy-making, with looming tax increases and sharp revenue cuts, gives forecasters pause. “We can’t afford another hit,” Hoene warns. “The recovery could easily be turned in the other direction.”
Read the entire story in American City & County, our sister publication.