Nearly Three-Quarters of Cities in Mayors' Poll Say Recession Has Delayed Capital Projects
WASHINGTON - Nearly three-quarters of the cities polled in a recent survey by the U.S. Conference of Mayors say the recession has forced them to postpone capital improvements, a local government expense that is often financed by tax-exempt bonds.
The survey of 62 cities also found more than half say the current economic downturn has hit them harder than the recession of 1981-82, and many believe they have not yet felt the full brunt of the downturn yet, according to a report by the mayors' group released Friday.
"What these cities have told us is that the current recession is deeper than the previous one, even though the previous recession was the worst downturn since the Great Depression," J. Thomas Cochran, the executive director of the group, said in a statement accompanying the report.
Street improvements were cited most often as the type of capital project cities are postponing, with about two-thirds of the 62 cities reporting delays. About a third of the cities polled said they were delaying projects to build low-income housing, police and fire stations, jails, and libraries.
The survey also found 58% of the cities in the survey reported budget shortfalls in fiscal 1991.
Nearly all the cities reported they are having trouble managing budget shortfalls because they are hampered in the types or the amount of taxes they can levy. About 60% of the cities said they had either laid off city personnel, were considering layoffs, or had made cuts through attrition.
The survey found 36 cities had attempted to measure the costs of federal and state mandates on their budgets. The average cost of complying with a mandate at the state level was more than $32 million and at the federal level was more than $21 million.
The survey is a follow-up to one released by the mayors in January showing a sharp reduction in federal aid as a percentage of city budgets during the 1980s. That survey also showed cities usually made up for the funding gap by raising taxes or laying off government employees.
It also follows a survey released in August by the National Association of Counties showing that more than a third of all large U.S. counties face budget shortfalls this year, and most of those affected have decided to delay capital projects or cut spending.
