(dollars)

•Calculations based on 54 Illinois cities, which had populations of 25,000 or more in 1977, but excluding the City of

Source: U.S. Bureau of the Census. Census of Governments, Finances of Municipal and Township Governments. 1977 and 1982; U.S. Bureau of the Census. Census of Governments, Finance Statistics, computer tapes, 1987 and 1992; and IIRA and IML. Illinois Municipal Price Index, 1994 Revisions, Macomb, IL 1994.

October 1996 / Illinois Municipal Review / Page 19

of 212.9 percent. Removing inflation reduces this expenditure to $251.20 per resident in 1992 (1977 dollars), an increase of 44.1 percent or approximately 3 percent per year. Thus, real growth occurred in city expenditures for services during the 1980s and early 1990s. The main focus, though, was on current expenditures, possibly with disinvestment in capital during this period. Capital expenditures are more difficult to compare, because they often are one-time activities. A large building construction project, equipment purchases, or similar activities may, under a cash accounting system, be recorded in one year. The fact that a multi-year project is paid in a single year distorts expenditures. These aberrations more often occur in capital expenditures, rather than in current operations.

In reviewing expenditures, it is usually more important to examine the most recent changes. Between 1987 and 1992, general expenditures, in constant dollars, increased 11.4 percent while current operations increased 8.2 percent. Capital outlays during this period increased 26.8 percent. It appears that cities may have postponed capital projects during the early years (late 1970s and early 1980s) when inflation was relatively high and a major recession was underway. Local officials may have attempted to recover these expenditures in the late 1980s and early 1990s.

Expenditure Changes by Department

Additional insight is gained when expenditure changes are examined by department. Two issues should be considered. First, the level of expenditure is important because it provides an estimate of resources spent on a specific service. For instance, highways and police protection are two large departments in an average city. In 1992, they represented $119.66 per capita (highways) and $115.57 per capita (police). In the case of police protection, expenditures increased 35.7 percent in constant dollars during this period. Much of the growth occurred after 1982.

A more detailed comparison by metro status shows that Chicago suburbs experienced much higher expenditure growth than cities downstate. For instance, highway expenditures in the suburbs increased 110.5 percent in constant dollars compared with 8.0 percent in independent cities. Two explanations are possible. First, suburban cities had larger economic growth and increases in tax base. Second, population and economic expansions in the suburbs required higher outlays for transportation systems.

Police protection expenditures increased 45.9 percent in the suburbs and 23.5 percent in independent cities. Higher compensation increases, partly because of higher living costs in the suburbs, could explain these trends. Also, fiscal resources in the suburbs may generally support higher expenditure growth than in downstate cities.

Highway expenditures, on the other hand, increased 52.3 percent during this period and the major portion was during the post-1982 period. This trend confirms the experiences reported previously that during the early 1980s, expenditures probably were diverted from capital projects to protect current operations. In recent years, when inflation was lower and the economy prospered, more attention was paid to capital projects.

Fire protection increased at approximately the same rate as police protection (35.8 percent) during this period. Personnel expenditures are a high percentage in both departments and it seems likely that increases in wages paid to police officers and firefighter were roughly similar during this period. The fact that compensation is a high portion of overall expenditures for these services, and compensation increases in these departments are often similar, probably explains the comparable percentage expenditure increases.

Expenditure comparisons are affected by the organizational arrangements for service delivery. Relatively few city governments maintain hospitals and, in many instances, parks and recreation services are provided by single function districts. Thus, even though significant changes may have occurred in the average expenditures for these services, they do not affect many cities.

Relative Importance of Expenditures
Changes in expenditures can also be analyzed by comparing the relative importance of each activity in the overall city expenditure package. The main point (Table 2) is that capital projects in 1977 represented 26.2 percent of expenditures compared with 19.4 percent in 1992. The fact that capital expenditures are lower could reflect the fact that capital projects have been completed and there is less need for additional work. Alternatively, it may reflect the fact that intergovernmental aid, such as General Revenue Sharing, was used for capital projects and now that these funds (Federal) are less, city expenditures are lower. The bottom line is that Illinois municipalities devoted fewer resources to capital projects in 1992 than they had 15 years earlier.

The second main finding is that the overall expenditure patterns in municipalities have not changed much since 1977. The exception is health and hospitals that went from 9.1 percent of total expenditures in 1977 to 0.9 percent in 1992. Some of these services may have been contracted and others provided by dif-

Page 20 / Illinois Municipal Review / October 1996

ferent governments. Also, given the diverse nature of services included in this category, the discontinuation of a hospital or large health agency managed by a city could affect average expenditures.

Of the main expenditure categories, police increased slightly from 16.6 percent to 17.1 percent and

Table 2. Reliance on Expenditures in Illinois Municipalities*

Expenditure Functions	1977	1982	1987	1992
		(percent)
General Expenditures	100.0	100.0	100.0	100.0
Capital Outlay	26.2	16.8	17.1	19.4
Current Operation	73.8	83.2	82.9	80.6
Health and Hospital	9.1	5.9	5.7	0.9
Highway	15.3	14.0	13.8	17.7
Police	16.6	16.1	15.7	17.1
Fire	11.2	11.5	11.1	11.5
Sewerage and Sanitation	10.5	8.8	11.5	9.5
Parks & Recreation, Housing	5.5	8.7	4.4	5.2
Other Expenditure	28.2	24.7	26.2	29.4
Interest on General Debt	3.6	10.3	11.6	8.7

•Calculations based on 54 Illinois cities, which had populations of 25,000 or more in 1977, but excluding the City of Chicago.

Source: U.S. Bureau of the Census. Census of Governments, Finances of Municipal and Township Governments, 1977 and 1982; and U.S. Bureau of the Census. Census of Governments, Finance Statistics, computer tapes, 1987 and 1992.

highways went from 15.3 percent to 17.7 percent. Fire protection expenditures were largely unchanged in relative importance, from 11.2 percent to 11.5 percent. Marked changes are not found in park and recreation or other expenditures.

Conclusions

The comparisons in this article can be helpful on two grounds. First, city administrators can place recent expenditure changes in long-term perspective. These data are not always readily available, but a comparison of expenditure trends in a city with averages of other cities in Illinois is useful for identifying aberrations.

Second, sometimes local decisions are made in response to immediate needs or budget requests with little recognition of the cumulative effect of these changes on the real resources available for specific services. Continued small cutbacks or expansions in departments over several years can bring substantial re-allocations of resources. These changes occur without a conscious decision to make changes in types of services provided. Monitoring the percentage distribution of expenditures provides management information on changes in resources available for services delivered. •

Cities Work Hard For America's Children

Cities are finding new, creative ways to meet the needs of children, whether they are day care programs for infants or esteem-building programs for teens.

(NAPS)—Across America, city officials are rethinking ways to meet the needs of their city's children and thereby insure a better future for all who live there.

"Community conditions that nurture families and children will strengthen the well-being and capacity of our cities and our nation as a whole," says Greg Lashutka, mayor of Columbus, Ohio, and president of the National League of Cities (NLC).

According to Critical Needs, Critical Choices, a new study by the NLC, municipal leaders throughout America are assessing the most critical needs, developing innovative ways to address them and finding resources to support their local programs.

Key issues nationwide are child care (including before- and after-school child care) and intervention/enrichment efforts for at-risk teens .

"The American family, as we know it, has changed dramatically in the last 20 years," says Mayor John DeStefano of New Haven, Conn., who chairs a NLC family issues committee. "Government has to reach out in new and creative ways to assist families, and we must have many partners at the table."

Collaborations to provide services can involve, federal, state, and county governments, neighborhood and civic organizations, religious institutions, the public school system and parents.

In Schaumburg, Illinois, the Kids After-School program, provided by the city in collaboration with the school district, park district and local YMCA, offers affordable child care for grade school children before and after school, on holidays and during the summer—a lifesaver for many concerned hard-working parents.

In Vancouver, Washington, the city-funded Tapping the Talents of Teens program invites middle and high school youth to apply for mini-grants to perform community service projects of their own design and invention.

Neighborhood Youth Services in Duluth, Minnesota, is a successful part of a city-wide effort to curtail increasing violence, abuse and juvenile crime. A collaboration between various city departments, Violence Free Duluth, court services and other local youth programs, this initiative teaches conflict resolution, problem solving skills and raising self-esteem.

The wealth of local self-sustaining initiatives in the NLC report describe a growing trend in America's cities and give concrete examples of what more cities could be doing.

To learn more about these and other city efforts, contact the NLC Center For Public Affairs, 1301 Pennsylvania Avenue, NW, Washington, D.C. 20004; Tel. (202) 626-3120.