Crisis Impact on US Cities
- September 01
- D&S BLOG
From The Financial Times. Worthy of note:
Because of assessment cycles, for example, it often takes several years for city property taxes to reflect changes in property values. For this reason, cities will feel the deeper effects of the recession beyond 2009, with the worst years being 2010 and 2011, the survey predicted.
That dynamic poses a potential headwind for a national economic recovery, as local governments lay off workers and scrap projects to cut costs.
“One out of seven jobs in the US is the state and local government sector,” said Christopher Hoene, director of the NLC centre for research and innovation. “It suggests that this sector is large enough to drag the economy down.”
It represents about 12-13 per cent of national gross domestic product, equivalent to the tourism sector, Mr Hoene said. “This is a big sector of the economy: they hire, they spend, they invest and not in inconsequential ways.”
Recession hits US cities’ finances
By Nicole Bullock in New York
Financial Times
Published: September 1 2009 13:44 | Last updated: September 1 2009 13:44
The finances of US cities continue to deteriorate as the ripple effects of a national recession reach local revenues, according to research.
For 2009, 88 per cent of city finance officers said their cities were less able to meet fiscal needs than in 2008, amid declining house values, restrictive credit markets, slowed consumer spending and rising unemployment, a survey conducted by the National League of Cities and released on Tuesday shows.
