Commentary

Citiesí financial mess

Cities continue to flounder in financial messes of their own making. They continue to spend more than they have, and the most common response is a predictable oneââ?¬â??raising existing taxes or cooking up new ones. Here’s the ugly snapshot: [According to a survey of 328 cities by the National League of Cities] more than four out of five finance directors surveyed (81%) said their cities were less able to meet financial needs compared with the previous year, the largest proportion since 1990. Spending increases outpaced revenue increases in cities’ 2002-2003 fiscal year by 3.1 percent compared to the previous year … City finance officers said the biggest negative factors affecting budgets were: ? Costs of city workers’ health benefits (cited by 63 percent), ? Costs of city workers’ pensions (30 percent), ? Reduction in state aid (29 percent), ? The local economy (25 percent), and ? Infrastructure needs (25 percent). …… In response to the deteriorating fiscal condition of cities: ? Nearly half (47 percent) of all cities increased fee rates in 2003, ? 30 percent reduced city employment, ? 29 percent imposed new fees or charges on services, ? 21 percent reduced actual levels of capital spending, and ? 11 percent reduced city service levels.

Ted Balaker is an award-winning filmmaker, journalist, and founding partner of Korchula Productions, a film and new media production company devoted to making important ideas entertaining.