• Description

Three years after the pandemic outbreak, cities have recovered and have maintained a largely positive outlook about their near-term fiscal future. The 2023 City Fiscal Conditions report analyzes data on a total of 820 cities (including the responses from 533 city finance officers from municipalities of various population sizes). Here are four key takeaways from this year's report:

  • Cautious budgeting resulted in better preparation: The cautious approach by many cities in 2023 yielded increased reserves and limited spending, demonstrating that local governments remain good stewards of public dollars.  
  • Better able to weather inflation: Despite the challenge of inflation, the average city experienced more than a six percent increase in general fund revenues. Inflation is more manageable and cities are reaping some benefits of lower inflation.    
  • Federal aid had a positive Impact on city budgets: Direct federal aid through the American Rescue Plan Act (ARPA) and the bipartisan infrastructure law was among the factors that had a positive impact on cities' ability to balance their 2023 budgets. 
  • Planning for uncertainties: Making it through a strong 2022 fiscal year, our survey analysis reveals that many cities are still very cautious in their budgeting. They anticipate potential risks and uncertainties in the post-COVID era as they plan for the current and next fiscal year. Among the concerns for local leaders is the expected end of federal funding through ARPA.