May 26, 2010; PR Web | Because of the Memorial Day holiday last weekend, this report from the Pew Charitable Trusts didn’t seem to get the wide pick-up it should have. Pew took a look at the municipal budgets of 13 major cities to see how they were likely to fare in Fiscal 2011.
The cities are Atlanta, Baltimore, Boston, Chicago, Columbus (OH), Detroit, Kansas City (MO), Los Angeles, New York, Philadelphia, Phoenix, Pittsburgh, and Seattle. Pew found that the cities were still going to face budget shortfalls, but less than the previous year’s. Budget-balancing strategies include sale-leasebacks of public properties such as parking garages and that ever-more-common fallback, new or expanded casino gambling.
Nonetheless, they would generally have to reduce their workforces, raise taxes, and impose or raise fees. As we have reported here before, Baltimore is going to tax nonprofit hospitals and universities, Philadelphia is cutting library hours (others aren’t reopening libraries and community centers they closed in 2010), and Detroit is “right-sizing” municipal government by consolidating agencies.
It isn’t hard to see the headlines for nonprofits in the Pew study. What strikes us is the assumption that the economy is getting better, therefore slowly municipal budgets will heal as well. The latest indications we’ve seen—persistently high unemployment, despite stimulus funding and hundreds of thousands of Census jobs, plus a surprisingly tanking stock market—tell us that the economy isn’t moving in the right direction, certainly not at the pace that some commentators would have us believe. The warning signs in Pew’s important study might actually have had a rose-colored tint.— Rick Cohen