NCPA - National Center for Policy Analysis

Cities Spend More, But Have Record Surpluses

July 26, 2000

Financial officials and other administrators in 353 cities report that they are in the best financial shape ever. In the survey conducted by the National League of Cities:

  • Some 73 percent of city officials said that they were in better financial shape than they were last year -- a slight decrease from 75 percent in 1999, but still much higher than 1994, when 54 percent of city officials said financial conditions had improved.
  • Looking to 2001, the survey says 63 percent of the cities expect to be in better shape financially -- with only 53 percent of Northeast cities sharing that optimism.
  • Although spending more, communities have larger surpluses than ever, with balances as a percentage of expenditures at the end of 1999 averaging a record 18 percent.

The league says cities are using most of their surpluses to expand police and fire departments and to replace crumbling streets, sewers and public buildings. They have been moving surpluses into rainy-day accounts, increasing spending on infrastructure or lowering debt and tax rates.

Still, with some states expecting budget shortfalls and spending cutbacks, league officials warned cities to plan ahead for less prosperous times.

Source: Frank Santiago, "Cities See Good Times Ending," USA Today, July 26, 2000.

 

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