City finances have long been under pressure, but the Great Recession and steady attacks on federal and state spending have compounded local financial difficulties. The National League of Cities' annual research brief, City Fiscal Conditions, documents rapid deterioration. Reported revenue declines of 2.5 percent in 2009 and 3.2 percent in 2010 were unprecedented in severity in the 25-year history of the survey. In 2010, 79 percent of cities reported cutting personnel, 44 percent cut services, 25 percent cut public safety spending, and 17 percent cut current employees' health benefits. Expectations going forward are even more downbeat.
Hard times call for new thinking. We are going through a systemic crisis, not simply a political crisis, and the assumptions of the last three decades about the relationship among politics, social and economic programs, and the economy are now obsolete. Cities everywhere can find surprising answers to fiscal difficulties by looking to scores of little-known innovative strategies under way in diverse communities across the nation.