Robert M. La Follette School of Public Affairs
Thursday, May 28, 2015

Cities increase reliance on fees as other revenues fall, analysis shows

Cities continuing to struggle with finances have been increasingly relying on user charges and fees, according to an analysis of freshly updated data from the Lincoln Institute of Land Policy's database on local government finance, Fiscally Standardized Cities.

La Follette School professor emeritus Andrew Reschovsky, a fellow at the Lincoln Institute, created the database with senior research analyst Adam Langley at the Lincoln Institute and Howard Chernick of Hunter College.

User charges and fees – for sewer systems, waste management, parks, city-run hospitals and airports, and for a range of services including education, housing and community development – are the only major source of revenue that has grown since the start of the Great Recession in 2007. On average, after adjusting for inflation, per-capita revenues from user charges grew by more than 7 percent from 2007 to 2012. During the same period, property tax revenues fell by 5 percent, and revenues from state aid and from other taxes by nearly 10 percent.

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