A new study released today by the American League of Cities shows that local tax revenues are decreasing for the first time in 7 years. As if it was not bad enough, the same study also predicts that revenue will continue to decrease for up to two more years. Check out the following story below on the recent findings courtesy of the Wall Street Journal:
Weak growth in property taxes, reflecting soft housing prices, did not counterbalance sharp declines in other sources of income, including sales taxes, income taxes and state aid, according to a survey of 379 league member cities.
Overall city revenues declined by 0.4%, even as expenses rose 2.5%, and city officials expect steep drops in tax collections in the next two years, making for the worst outlook in the 24 years the group has been surveying its members. Western cities were particularly downbeat.
The gloomy mood "is indicative of the depths of the downturn, that they have the worst ahead of them, and the fact that the recession is universally hitting their revenue sources," said Chris Hoene, research director for the league.