Stagnant economy, foreclosure crisis, and other challenges cited
(June 16, 2008—St. Paul, Minn.) The share of Minnesota cities reporting improved fiscal conditions in 2007 dropped sharply from more than half in 2006 to 40 percent, according to the 2008 State of the Cities Report released late last week by the League of Minnesota Cities. That is the smallest share of cities better able to meet financial needs since 2004—the second year that the survey was administered and the year following a 25 percent cut in state aid to cities.
The fiscal conditions survey included questions asking city officials to indicate whether or not they were better or less able to meet financial needs in the current year than in the previous year, and to predict whether they will be better or less able to meet those needs in the future. The survey was sent to 830 League of Minnesota Cities members, and generated a 56 percent response rate. Cities identified increases in the following budget pressures most often in 2007: infrastructure needs; the cost of employee pensions; and prices, cost of living, and inflation. Cities reporting increasing spending needs in a number of those areas were more likely to also report being less likely to meet financial needs.
The study also explores how the recent housing foreclosure crisis and the pursuit of energy efficiency affect city fiscal conditions. Eight-two (82) percent of the cities responding to the survey identified one or more negative effects of foreclosures on their communities including delinquent utility fees and taxes, problems collecting delinquent utilities, property maintenance issues, and delinquent property taxes. Half of those cities reported at least five distinct foreclosure issues.
Additionally, the report noted that about 58 percent of Minnesota cities that responded to the survey have implemented at least one initiative to increase energy efficiency. The most frequently cited initiatives by Minnesota Cities were: replacing incandescent light bulbs with compact fluorescent ones (56 percent), controlling temperatures with programmable thermostats (47 percent), using high-efficiency operating systems (39 percent), and installing water-efficient fixtures (24 percent). The report also features case studies highlighting a range of energy efficiency initiatives employed by seven Minnesota Cities, including Anoka, Apple Valley, Elk River, Minneapolis, Northfield, Rushford Village, and Wells.
The League of Minnesota Cities is a non-profit, membership organization dedicated to helping cities throughout Minnesota build quality communities through effective advocacy, expert analysis, trusted guidance, and collective action. The League serves its more than 800 members through advocacy, education and training, policy development, risk management and other services.