Report: Cities strapped by declining tax revenue

By DANIEL WAGNER | September 27, 2011 | 10:45 AM EDT

WASHINGTON (AP) — A new survey says more than half of cities have cut staff, canceled projects or raised fees this year to cope with shrinking property- and income-tax revenue.

The National League of Cities says cities are struggling to make ends meet. High unemployment, weak housing markets and slow spending have reduced the tax money they collect. Rising health care and pension costs for city workers are also draining budgets.

Two-thirds of city finance officers said they had delayed or canceled public works projects. Two in five reported raising fees for city services. One in five had cut spending on public safety.

The annual survey found the impact of the recession on cities was delayed because it took time for lower home values to affect property tax bills.