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High Unemployment, Growing Skills Gap, And Demand For Survival Services Key Concerns Among City Officials New Report Shows

"The report shows the weight that these barriers have on local economic growth," Christy McFarland, the report's author and Interim Director of NLC's Center for Research and Innovation said. "Workforce development and job creation are integral to the economic health of our communities, and without federal investment in these areas, we will probably continue to see high unemployment, severely hampering cities' economic recoveries."

A majority (56%) of city officials also report that the demand for basic survival services including food, heat, and clothing is a widespread problem in their community, and one in four responded that the condition has actually worsened in the past year.

While the report shows improvement in key indicators of local property tax base, including housing starts, building permits, and residential property values—it also revealed that a weakened real estate market continues to weigh on city's economic health.  

Over half of city officials reported that commercial and residential property vacancies and values are still a problem for their communities. This may have continued implications for cities as most receive the vast majority of their revenues from property tax collections.

The survey also revealed the increasing confidence of local officials through anticipated spending and investment activities. More than one in two city officials anticipate increasing investment in 2013 in new infrastructure and capital projects.  While these numbers are optimistic, officials remain cautious about proposals to change the tools needed to finance these projects. If the federal government limits the income tax exemption for interest earned on municipal bonds—the primary financing mechanism for local infrastructure projects—61% of respondents report that they would limit the number of projects undertaken; more than half report that they would also reduce the scope of the projects undertaken.

"Protecting the tax-exemption on municipal bonds is just one of the ways federal lawmakers can support economic development in cities," said NLC First Vice President Chris Coleman, mayor, St. Paul, MN. "The report indicates that city leaders are ready to make infrastructure investments, but we must have the confidence from Washington lawmakers that we will be able to secure funding for these much needed projects that drive job creation and improve the quality of life for our citizens."

"This report clearly reinforces the urgency for the federal government to accelerate the nation's growth through smart investments and strategic cuts that will help build healthy local economies," said Clarence Anthony, NLC's executive director. He continued, "Local leaders continue to press for investments in workforce education to train workers to compete in the next generation of jobs, and in infrastructure investments that put people back to work while improving the ability of business to move products around the country.

The full report can be found here: http://www.nlc.org/find-city-solutions/center-for-research-and-innovation/economic-development/economic-development-leadership/2013-local-economic-conditions-survey.

The National League of Cities is dedicated to helping city leaders build better communities.  NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans. 

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