Cities forced to cut staff, projects as revenue slips

More than half of U.S. cities have cut staff, canceled construction projects or raised fees this year, according to a report from the National League of Cities that catalogs the damage from shrunken property- and income-tax revenue.

Cities are struggling from the same problems that have left the national economy sputtering: high unemployment, a depressed housing market and weak consumer spending. Those factors have reduced the taxes that cities collect for a fifth straight year.

Two-thirds of city finance officers said they had delayed or canceled public works projects this year. Two in five reported raising fees for city services. One in five had cut spending on public safety. Nearly one in three had laid off staffers.

 

Home prices climb in July in most major U.S. cities

The depressed housing market flashed a positive signal in July, with home prices in most major U.S. cities rising for the fourth straight month.

The Standard & Poor’s/Case-Shiller index released Tuesday showed that prices rose from June to July in 17 of the 20 cities the index tracks. Detroit, Chicago and Minneapolis posted the biggest percentage gains. Prices fell in two cities among those hit hardest by the housing crisis: Las Vegas and Phoenix.

The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The July data are the latest available.

 

Walgreen earnings rise, stock falls on stalled deal

Shares of Walgreen Co. tumbled Tuesday, as investor concerns over the fate of a multibillion-dollar contract outweighed a jump in the drugstore operator’s fiscal fourth-quarter earnings.

The Deerfield, Ill., company said Tuesday morning there has been no substantive progress in contract renewal negotiations with Express Scripts Inc., and company officials later told analysts the two sides remain “miles apart.”

Walgreen said that the St. Louis company is not paying it enough money to fill prescriptions. It also complained that Express Scripts was trying to dictate terms of the partnership.

Pharmacy benefits managers, or PBMs, like Express Scripts pay Walgreen to fill prescriptions. The PBMs make money by reducing the costs in prescription drug plans.

Walgreen shares fell 6 percent, or $2.26, to close at $33.77 Tuesday.

 

Best Buy planning to hire fewer workers for holidays

Best Buy Co. will hire about half as many seasonal staff as last year and increase the hours its regular staffers work as part of its plans for the crucial upcoming holiday season.

The largest U.S. electronics retailer also plans to expand services like free tech support and lengthen the window for product returns during the holidays. It will also promote under-$100 deals to coax shoppers into stores.

Best Buy, based in Minneapolis, said this month that its second- quarter net income fell 30 percent and revenue was nearly flat at $11.35 billion, falling short of analysts’ expectations, as the company continues to battle for market share with online retailers and discount stores.