2014 was a good, but not great, fiscal year for cities. As I wrote in October, 80 percent of city financial officers report that they’re “better able” to meet financial needs. Despite this, revenues from the year are projected to have remained flat.
But 2014 is almost so last year, so here’s my forecast about the future budget issues impacting cities.
Many are asking for money for body cameras, which would (ideally) increase departmental transparency and officer accountability. But a paradoxical effect of the widespread protests to the deaths of Michael Brown and Eric Garner is that departments are also asking for more manpower to contend with large-scale civil disobedience.
In Harris County, Texas (where Houston is), Sheriff Adrian Garcia has requested $16 million on top of the $436.8 million that was proposed for his department.
“(We) need to make sure that we are able to train our personnel to meet the challenges that we’re seeing coming out of the issues in Ferguson and New York,” said Garcia at a recent budget hearing. “It is a fiscally sound recommendation I believe, to ask for 2 percent on top of their 5 percent recommendation.”
The Harris County Commissioners Court has already approved a district attorney’s plan to spend $1.9 million in civil asset forfeiture money to go toward body cameras for the Houston Police Department. It’s fair to expect other departments around the country will also try to find creative solutions to fund 21st-century policing.
Property Tax Revenues Will Continue to Increase
According to the National League of Cities’ annual City Fiscal Conditions Survey, cities are going to start reaping some of the fiscal benefits of gentrification.
Philadelphia has been implementing its newish property tax assessment system, the Actual Value Initiative (AVI); some of the property assessment data pre-AVI had not been updated since the 1980s. While this tech-driven improvement will funnel much more money to city coffers — especially in gentrifying neighborhoods — there is a huge concern about the displacement of longtime residents who can’t afford to pay the spiking bills. While Philly’s issue might be unique, rising property taxes will be widespread as home values in rejuvenated cities across the country continue to rise.
Cities Will Scrounge to Create Universal Pre-K
Education is key to keeping any city family-friendly. While funding public school districts has become a divisive issue, there’s been a lot of support for free, universal, full-day pre-kindergarten. New York rolled out one of the country’s most ambitious programs this fall, with $300 million in funding from the state. Even so, the city had to additionally concede locations for the placement of new charter schools.
Cities and states will have to continue searching for pocket change in order to expand universal pre-K, while at the same time, having to address the dire needs of elementary, middle and high school students.
Pensions Are Off the Backburner
Detroit’s bankruptcy forced city employees to accept a reduction to their monthly pension checks. Chicago has a $19.4 billion unfunded pension liability. And yet, the city’s budget for 2015 put off hiking property, sales and fuel taxes, which could have helped them to keep up with their payment schedule. They will not be able to do that again.
Other cities should learn from these bad examples and base their pension budgets on honest accounting, realistic projections and a strong commitment to keeping up with payments.
The Equity Factor is made possible with the support of the Surdna Foundation.
Alexis Stephens was Next City’s 2014-2015 equitable cities fellow. She’s written about housing, pop culture, global music subcultures, and more for publications like Shelterforce, Rolling Stone, SPIN, and MTV Iggy. She has a B.A. in urban studies from Barnard College and an M.S. in historic preservation from the University of Pennsylvania.