According to a November 2010 survey by the Washington-based National League of Cities, nine out of 10 city finance officers reported that their cities were less able to meet fiscal needs in 2010 than in the previous year, citing declining local economic health, public safety and infrastructure costs, employee-related costs for health care, pensions and wages, and cuts in state aid. How did finance officers say they would meet the crisis? Delaying or canceling capital projects (69 percent) was the second most common response to the fiscal crisis, following only personnel-related cuts (79 percent). (See "Report: Recession's effects will continue for cities.")

The prospects for the coming year are hardly encouraging. With property tax revenues from real estate markets remaining soft, at best, and large budget shortfalls at the state level trickling down in the form of reduced grants and revenue sharing, finance officers predicted that the 2011 report in November will only be worse. "The effects of a depressed real estate market, low levels of consumer confidence and high levels of unemployment will likely play out in cities through 2010, 2011 and beyond," according to the report.

  • Read the main story, "Tough going," to learn how public works departments keep pushing to meet the demands from recession-racked communities.