Washington, D.C.— Many local governments have established new “normals” that will remain in place after the U.S. the economy rebounds, according to the results of a new survey released today by ICMA, the International City/County Management Association.
More than 80 percent of the 2,200 local governments that responded to ICMA’s “State of the Profession” survey report that they have been “moderately” to “severely” affected by the financial crisis and experienced an average budget shortfall of more than 8 percent for 2010.
“That the recession has changed the way governments operate at the local level isn’t surprising,” said Ron Carlee, Director of Strategic Domestic Initiatives at ICMA and former Arlington County Manager. “However, the widespread belief that the coping strategies represent a new normal is a significant development with big implications for local governance.”
Topics examined in the survey include unemployment, foreclosures, budget shortfalls, and reduced revenues. The survey results, covered in a recent Financial Times article and a Twitter feed from Politico’s National Politics Editor Charlie Mahtesian also revealed that:
- Ninety percent of local governments report budget shortfalls for FY 2010 that are the same (37%) or greater (53%) as FY 2009. The Mountain West and Pacific Coast regions of the country demonstrate especially hard-hit budgets, with an average FY 2010 shortfall of 11% of the general fund budget.
- The three most popular ways that local governments are dealing with the recession are leaving vacant positions unfilled (66%), deferring capital projects (60%), and implementing targeted cuts in expenditures (52%).
- By a 66-34% margin, local governments think that the changes they have implemented during the recession represent a new way of doing business that will continue beyond the fiscal crisis.
- The highest average number of homes that went into foreclosure is in the South Atlantic division, which includes Florida, followed by the Mountain division and the Pacific Coast. As a percentage of the total stock of homes, this represents approximately 4% for these geographic divisions.
- Localities anticipate the following percentages of decrease in revenue from these sources:
- Sales tax – 10% decrease in revenue
- Property tax – 10% decrease in revenue
- Income tax –10% decrease in revenue
- Fees from activities/services – 14% decrease in revenue
- Payments from the state – 16% decrease in revenue
- Impact fees – 40% decrease in revenue
- Interest from investments – 28% decrease in revenue
The survey results reflect the print and online responses of 2,214 local government respondents from across the nation.
ICMA, the International City/County Management Association, advances professional local government worldwide. Its mission is to create excellence in local governance by developing and advancing professional management of local government. ICMA, provides member support; publications, data, and information; peer and results-oriented assistance; and training and professional development to city, town, and county experts and other individuals and organizations throughout the world.