Cities with declining financial conditions driven by the housing market downturn and lower tax collections in 2008 have not seen the worst of it and will still face difficulties during the next few years, the National League of Cities warned in a new report this week.

"It's the first evidence of what's likely to be a two-, three-, four-year long cycle of really tight fiscal conditions for city governments," Chris Hoene, co-author of the report, said in an interview this week. "Everything that's happened since June - everything that's happened in the last few days, in fact - is only going to make it worse."

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