City of New York Competition
Now Viewing City of New York's competition in: Municipal Governments
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Has the local population changed significantly in the past decade? - Changing age and race demographics can require a shift in local services.
Competitive Landscape
The demand for municipal services is driven by population growth and demographics of the local population. Because municipalities must operate with a balanced budget, loss of revenue results in loss of services, usually through job cuts. Municipal government is labor-intensive: average annual revenue per employee is about $88,000.
Business Challenges
CRITICAL ISSUES
Local Economy Affects Revenue - Municipal governments traditionally get about half their revenue from stable local sources such as property taxes; however, in the late 2000s housing market crash, property tax revenue dropped by at least 10 percent in some areas due to declining home values. Further, much of the rest of municipal governments' revenue is from less reliable state and federal sources. The bulk of state and federal revenue is from taxes related to income or sales, both of which can fall sharply during an economic slowdown; funds for schools and highway construction are most vulnerable to economic cycles.
Employee Benefit Costs Rise Rapidly - Expenses will increase faster than revenues for many municipalities because of the cost of benefits. Since labor is the largest cost for municipalities, large expected increases in healthcare costs during the next decade will squeeze many budgets. The Congressional Budget Office (CBO) predicts that by 2025, 25 percent of the US economy (as measured by Gross Domestic Product, GDP) will be dedicated to healthcare spending; currently it is 16 percent, and in 1970 it was 7 percent.
Industries Where City of New York Competes
- Government
- US Local/County/City
