Research Corner: National League of Cities' City Fiscal Conditions 2025 report

While many of CML’s members recently contributed their data and insights to CML’s State of Our Cities and Towns (SOOCAT) survey, the National League of Cities conducts its own survey investigating municipalities’ financial health. The nationwide City Fiscal Conditions 2025 report can help us assess how Colorado municipalities fare compared to the rest of the country.

Similar to responses received in CML’s SOOCAT survey, NLC respondents indicated infrastructure needs, prices and inflation, employee wages and benefits, and public safety needs as the factors that most impact municipal budgets. The full report is on the NLC website. 

Highlights from City Fiscal Conditions 2025 

• Nationwide, cities observed a 7.5% increase in general fund spending in fiscal year 2024, meanwhile growth slowed to 0.7% in FY2025.

• This is paired with a projected 1.9% decline in revenue in FY2025 as federal aid tapers.

• Public safety is the largest area of municipal spending, making up 60% of general fund budgets in FY2025.

• Recreation and culture spending hovers at 10% of general fund budgets in FY2025.

• Only 45% of city finance officers feel optimistic about meeting fiscal needs in FY2026, down from 64% in 2024. 

Source: National League of Cities, City Fiscal Conditions 2025 survey