When compared to two previous recessions, the impacts from the Great Recession are much more substantial in depth and duration, according to the National League of Cities’ (NLC) latest City Fiscal Conditions Survey.
The 1990 recession brought on three years of decline, but city budgets recovered in less than two years. In the 2001 recession, cities experienced revenue declines and volatility for four years but recovered in two.
The Great Recession brought six years of declines and, after three years, revenues are nowhere near prerecession levels.
The prolonged delay is because all three municipal tax sources — property, sales, and income — fell at once. In previous downturns, the typical 18-month lag in property tax assessments and collections provided a financial buffer because they traditionally moved in the opposite direction of sales and income tax receipts.
The NLC has conducted this survey for 30 years. Read the full report.