Oct. 30 (Bloomberg) -- Winners of mayoral races in New York, Boston, Miami, Detroit, Seattle, Atlanta and Houston on Nov. 3 will take over cities coping with the worst financial conditions in a generation.

Income- and sales-tax revenue withered by the recession has left U.S. cities an average of 2.9 percent short this fiscal year, according to the National League of Cities. Real-estate taxes dragged down by falling property values will depress budgets further in 2010, making it harder for cities to meet financial obligations than any time in the last 24 years, the league said.

“Cities will be navigating the implications of the downturn for a while longer, even if the business climate turns around immediately,” said Michael A. Pagano, a professor of public administration at the University of Illinois at Chicago and co-author of the league’s September report.

New York Mayor Michael Bloomberg, 67, is running on the Republican and Independence ballot lines for a third term against Comptroller William Thompson, 56, a Democrat.

The biggest U.S. city faces higher sales taxes, property taxes and water rates to close a budget gap of as much as $5 billion next year. The mayor is founder of Bloomberg LP, parent of Bloomberg News.

Boston Race

Boston Mayor Thomas Menino, 66, is seeking a fifth term to become the city’s longest-serving chief executive. He called for job cuts and union wage freezes in April to close a $140 million deficit projected in the city’s 2010 budget. His challenger, City Councilor Michael Flaherty Jr., would use public-private partnerships, federal stimulus funds and a reorganized Boston Redevelopment Authority to lure new businesses to repair the city’s finances.

Miami City Commissioners Joe Sanchez, 44, and Tomas Regalado, 62, are running to replace Mayor Manny Diaz, who’s served the limit of two terms. Diaz negotiated police-union wage reductions, citywide job cuts, reduced services and raised fees to help close a $118 million shortfall in this year’s budget.

Detroit Mayor Dave Bing, a former professional basketball player and business owner, is seeking his first full term after winning a special election in May to replace Kwame Kilpatrick, who resigned after pleading guilty to lying under oath about an extramarital affair.

Bing cut more than 400 city jobs, lowered pay and reduced bus services to help close a $280 million accumulated budget deficit, according to the Detroit Free Press. The shortfall is projected to grow to $480 million next fiscal year as the city loses revenue from the shrinking auto industry. Bing has proposed leasing city assets as a new revenue source. His opponent is Tom Barrow, a 60-year-old accountant.

Seattle Mayor

Seattle’s race has no incumbent after Mayor Greg Nickels lost in the primary election. Nickels closed a $72 million revenue gap in the 2009-2010 biennial budget with spending cuts that pared 310 jobs, imposed unpaid leaves and took $25 million from reserves. The budget leaves a $5 million surplus for the next mayor, either Joe Mallahan or Michael McGinn. The business executives are sparring over replacing the Alaskan Way Viaduct along the city’s waterfront with a $4.2 billion tunnel.

Six candidates are vying for mayor of Atlanta to replace the two-term incumbent, Shirley Franklin. Franklin raised property taxes and cut jobs in the police and fire departments to eliminate a projected $140 million deficit in fiscal 2010.

The field includes Councilwoman Mary Norwood, state Senator Kasim Reed, City Council President Lisa Borders, former police officer Peter Brownelowe, community activist Kyle Keyser and lawyer Jesse Spikes.

Houston Mayor Bill White isn’t running after serving the limit of three terms. He’s been at odds with City Controller Annise Parker, a candidate to replace him, over the size of the deficit in the current-year budget. Parker asserts the budget faces a $103 million revenue shortage; White puts the potential gap at $25 million after a series of cost reductions. Two other candidates are City Councilman Peter Brown and former City Attorney Gene Locke.

To contact the reporter on this story: Jerry Hart in Miami at jhart@bloomberg.net.

Last Updated: October 30, 2009 10:11 EDT