State and Local Government Revenue, Spending Increase

January 7, 2015

2 Min Read
State and Local Government Revenue, Spending Increase

American City & County

For the first time since 2011, local, state and federal governments have all increased their collective spending. This has resulted in small but noticeable upticks in local economies.

Both conservative and liberal state and local governments have slowly starting hiring to fill vacancies and re-starting stalled projects, according to The New York Times, indicating financial pressures are beginning to lessen.

The numbers back up this anecdotal evidence. According to a National League of Cities report, 80 percent of city finance officers reported their cities were better able to meet their fiscal needs in 2014 than in 2013, the highest percentage in the survey’s 29-year history.

This security has stemmed from increased revenues, mostly from increased sales, property and income taxes. The survey found that 2013 marked the first post-recession year of total revenue increases, but these gains began to stagnate as 2014 came to a close.

Experts agree that the long-term effects of the recession are still not over. “There has been some belt-tightening that looks like it’s not going to be loosened again,” Tara M. Sinclair, an associate economics professor at George Washington University told The New York Times. “People may be breathing a little easier. But there’s not tons of money sloshing around, even for minor expenses.”

And the recovery has not been evenly applied, The New York Times reports. Cities in Alaska are feeling the economic pressures of plummeting gas prices while municipalities in California are enjoying a budgetary surplus – many for the first time in years.

Naples, Calif., is one experiencing a surplus, and due to the extra funds, the city was able to hire two new part-time employees. While the $10,000 dedicated to pay these workers is a drop in the city’s $32.9 million budgetary bucket, The New York Times reports it is an important symbolic gesture that indicates municipal economic growth.

For more on the financial conditions of cities as they enter the new year, read part one of the Keating Report, or download the National League of Cities’ Fiscal Conditions 2014.

Originally published at American City & County

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