For my analysis, I took a look at the planning and development department budgets of five different cities in the Twin Cities metro. I tried to vary the cities I picked by size and location. In the end, I chose to look at the budgets of Minneapolis, Roseville, Burnsville, Blaine and Wayzata. I gathered city budget data for all of them and tracked their trends from 2007-2012. I wanted to see how planning and development budgets fared in comparison to seemingly more stable departments like public works and public safety. I also looked at general fund expenditures to get a sense for overall trends.
I expected to see a few things in particular. I thought that all cities would show some turbulence in their budgets from 2008-2010 due to the recession. I believed there would be significant cuts during that time, especially for planning and development. I thought that planning and development would see the biggest cuts because cities would see it as the easiest to reduce because it is more of a luxury good. Planning and development is likely more of an elastic good for the city compared to public safety and public works.
The first thing I found was that planning and development was the most volatile of the three departments considered. Budgets from year to year varied widely, and some of this is due to the stimulus and cuts seen to intergovernmental grants, such as Community Development Block Grants. An example for the City of Minneapolis is below.
I also found that several cities' general fund budgets didn't behave like I thought they would. While Wayzata and Blaine decreased their expenditures during the recession, others, like Roseville, didn't cut general fund expenditures during the recession. This variability makes it hard to generalize how cities are impacted by recessions.
Thirdly, planning and development budgets saw the steepest cuts during the five year period I analyzed. Four of the five cities had a budget in 2012 that was lower than it was in 2007, and three of them were reduced by more than 15%. As expected, public works and public safety were much more stable. I believe this is because they have more stable sources of local revenue and they are seen as more essential services for the cities to provide.
I believe that cities have to find more ways to fund planning and development locally. They will have to get more creative with property taxes or fees in order to keep their staff levels from shrinking. It is unlikely that federal funding will come back to 2006 levels any time soon. Business property taxes and local entertainment sales taxes are two options to consider to keep community revitalization strong for cities.