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Biggest spending cuts by city governments in one chart

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A new report from the National League of Cities takes a close look at how the recession has shrunk city budgets, forcing them to make layoffs, roll back infrastructure projects, and make cuts to public services.

Budgets have shrunk through two channels. First, cities have lost revenue in a number of key ways: the depressed housing market reduced property tax collections, declining wages have affected income taxes, and depressed consumer spending has curbed sales tax revenue. State and federal aid has also dropped. At the same time, they’ve made big cuts in expenditures as budgets have been squeezed.

How have city governments coped with these changes?


Such cutbacks explain why even Republican mayors have been lobbying Washington to provide federal support for infrastructure projects and other forms of direct aid to local governments. The fiscal outlook has improved slightly overall since the worst of the recession, and there are some regions that have bounced back faster than others. But on the whole, city budgets still haven’t recovered to pre-recession levels: according to the NCL, 43 percent of cities saying they’re “better able” to meet their financial needs in 2011, but 57 percent say that things are even worse.

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