More than two-thirds of U.S. cities are reporting improved fiscal performance in 1997, according to a survey by the National League of Cities. Although some cities and towns -- particularly in California and the Northeast -- are still experiencing budget and revenue problems, such once hard-pressed cities as Detroit and Cleveland are witnessing a resurgence in central city residential construction.

Here are a few highlights of the report:

• Some 68 percent of the 338 cities surveyed are better able this year to meet financial demands than in the past, and 55 percent are optimistic about the future.

• A majority (56 percent) of cities are increasing capital expenditures this year, and 55 percent say the growth rate of operating budgets will rise -- primarily for infrastructure programs such as streets.

• About 36 percent are increasing their workforce, and 29 percent report increased levels of services -- primarily for police protection.

• But 32 percent report increases in taxes or fees, while only 19 percent report reductions in local taxes.

Factors which are helping cities' finances include the robust national economy, stable local tax bases, more careful budgeting and, in some smaller towns, novel revenue raising techniques (such as burglar alarm taxes and ambulance fees). Those experiencing problems cite population losses, the cost of employee health benefits, federal and state mandates and restrictions on local budget authority.

Source: David Judson, "More Than Two-Thirds of Cities Win Battle of the Budget," USA Today, July 8, 1997.