Economy Watch: Some City Budgets Rearch Pre-Recessionary Levels
According to a study released by the Pew Charitable Trusts on Monday, some of the largest U.S. cities have seen their municipal budgets recover from the lows of the recession, when steep drops in tax revenue and other income cut into city coffers.
By Dees Stribling, Contributing Editor
According to a study released by the Pew Charitable Trusts on Monday, some of the largest U.S. cities have seen their municipal budgets recover from the lows of the recession, when steep drops in tax revenue and other income cut into city coffers. The organization did an analysis of the financial reports of the 30 largest cities in the country to come to its conclusions.
By the end of fiscal 2011—which for most cities ended on June 30, 2012, and is the latest year for which the data were available—the revenues of nine cities had recovered from the recession, reaching their pre-recession levels. They included Atlanta, Chicago, Dallas, Pittsburgh, Portland (Ore.), San Antonio, San Francisco, St. Louis and Washington, DC. Five other cities had almost recovered: Baltimore, Cincinnati, Denver, New York and Philadelphia.
Though revenues have expanded, the main factor boosting municipal bottom lines in the wake of the recession was intergovernmental assistance. That is, the states and the federal government, though various mechanisms, started kicking in more money to the cities, according to Pew. In each of the nine cities that completely recovered, such aid was either the first- or second-largest contributor to the recovery.
Personal income sees uptick in September
The Bureau of Economic Analysis reported late last week that U.S. personal income increased $67.4 billion, or 0.5 percent, in September compared with August, and disposable personal income—after taxes—increased $64.8 billion, or 0.5 percent. Real disposable personal income, which is adjusted for price fluctuations, increased 0.4 percent in September, the same increase as in August.
Personal consumption expenditures—the government’s term for people buying things—increased $24.7 billion, or 0.2 percent, for the month, according to the BEA. Real personal consumption expenditures increased 0.1 percent in September, with purchases of durable goods falling 1.2 percent in September, in contrast to an increase of 1.7 percent in August. A drop in the sales of motor vehicles and parts accounted for most of the decrease in September.
Personal saving was $619.9 billion in September, compared with $587.6 billion in August, the bureau reported. The personal saving rate—personal saving as a percentage of disposable personal income—was 4.9 percent in September, compared with 4.7 percent in August. Prices were only up 0.1 percent for the month, the BEA also reported.
Wall Street was open for business on Veterans Day, but the exchanges didn’t move much, with the Dow Jones Industrial Average gaining 21.32 points, or 0.14 percent. The S&P 500 advanced 0.07 percent, while the Nasdaq barely eked out a gain at all, up 0.01 percent.
