Industry News

On August 13, 2020, the National League of Cities (NLC) released the results of its annual survey, City Fiscal Conditions 2020.  The report provides perspective about the importance of local fiscal health for national economic recovery.  The survey of city finance officers indicates that U.S. cities are experiencing the fiscal consequences of the pandemic-downturn at an unprecedented rate.  It is expected to take years for municipal budgets to recover from the impact of COVID-19. 

The report’s key findings include:

• In Fiscal Year (FY) 2021, nearly 90% of cities will be less able to meet the fiscal needs of their communities than in FY 2020, which has not been reported since the Great Recession in 2008;
• For FY 2020, year-over-year general fund revenue growth is currently estimated at near zero;
• On average, cities estimate that general fund revenues will decrease 13% from FY 2020 to FY 2021; and
• In FY 2020, all major local tax revenue sources slowed with severe year-over-year declines in receipts in sales (-11%) and income tax (-3.4%).

The 2020 survey data was based on a sampling of more than 1,000 cities with populations over 10,000.  In total, the 2020 data was based on responses from 485 cities (48.3%) assessing their fiscal status, actions taken, and the factors affecting fiscal conditions. 

The report is available here.