According to a poll conducted by the National League of Cities which polled finance officers of cities with populations greater than 10,000, sales tax collections are expected to remain flat in 2011 after an 8.4 percent decline in 2010. Income taxes and property tax collections are expected to decline in 2011.
The overall decrease in tax collections could translate into increased fees for city services as they try to make up for decreased cash flows. Additionally, some finance managers indicated that hiring freezes, layoffs, a reduction of benefits, and a delay of building projects were also probable reactions to the stagnant growth of collections. The report indicated that the likely culprit behind the flat/decreasing collections is the weak economy.