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fiscal year is the first that revenues are anticipated to rise past the levels of those in 2007, though not by much, DeFebbo said.

The city derives most of its revenues from its occupational tax, meaning that as unemployment increased, revenues to the city decreased. In the current fiscal year, more than 71 percent of revenues are expected to come from occupational fees.

But overall, Bowling Green government has managed the recession effectively, DeFebbo said.

The city first started to make adjustments because of the recession in December 2007, though prior to that point the city had started to reduce government costs and eliminate unnecessary positions based on direction from the Bowling Green Board of Commissioners, he said.

"Some cities didn't take the recession seriously," DeFebbo said. "We took it serious and early."

The city's workforce has been reduced by about 5 percent overall since 2006, which has helped save about $5 million in salary, benefits and retirement costs, he said.

The worst effects from the recession on city government came in 2009 and 2010, when about $3.6 million was cut from city budgets, DeFebbo said.

"We've created what you call a new normal," he said.

That new normalcy includes a focus on the essentials, investments in a few key areas and a focus on operating with fewer employees, DeFebbo said.

Causes of the recession

One key factor behind the economic recession was excess spending by consumers, businesses and government in the early 2000s, Strow said.

"Every sector of the economy was borrowing more quickly than normal, and the problem is, we woke up one day and figured we had to start making interest payments on that debt and it became difficult," he said.

The government had budget surpluses in 1999, 2000 and 2001, but after that point, more money started going to big-ticket items such as a Medicare prescription drug benefit and conflicts in the Middle East, he said.

While budget surpluses are far from normal for the government, "somebody had to actively do something to stop that trajectory," Strow said.

Government debt can create slower economic growth in the country as a whole, Strow said.

The weak economy can also be tied to the crisis in the housing market, Carey said.

Beginning in 2004, increases in interest rate adjustments in the subprime mortgage market spurred a large number of delinquencies and foreclosures that had a large impact on the banking industry, according to a paper Carey wrote about the housing market in Bowling Green.

That crisis, coupled with factors such as falling home prices, higher interest rates, falling stock market prices and rising energy prices, contributed to a collapse of the housing market, she wrote. That collapse and the subsequent recession led to higher rates of unemployment and slowing income growth nationally and locally.

The recession technically began in December 2007 and ended in June 2009, according to information provided by Carey. Since June 2009, the economy has been in recovery.

Opinions differ on the impact that stimulus spending and bailouts in the auto and banking industries by the federal government have had on the economy, Carey said.

"Economists are divided just like the politicians are on these issues," she said.

Whenever you have such a large stimulus, there are going to be some short-run effects because of the amount of money in question, Carey said. It's unclear what would have happened if bailouts and stimulus hadn't been put into place or if short-run effects will prove to hold true in the long term, she said.

Locally, the city of Bowling Green received about $150,000 in money from federal stimulus funds, which was used to do a stormwater project in the Tax Increment Financing district, DeFebbo said.

"Stimulus funding in Bowling Green was modest at best," he said.

Vitale said stimulus and bailout spending were felt locally through the GM bailout and, most important, in infrastructure spending on roads such as Interstate 65.

Strow said bailouts and large amounts of stimulus spending have simply added to government debt, which in turn slows economic growth.

Instead, the government should take action by doing things such as lowering tax rates, specifically corporate tax rates, getting rid of tax loopholes and deductions and reforming entitlements, he said.

Such suggestions were made by the National Commission on Fiscal Responsibility and Reform, a bipartisan group, Strow said.

"There's agreement from economists on what you need to do, it's just whether or not you can get a politician to bite," he said.