Crisis and Constraint in Municipal Finance: Local Fiscal Prospects in a Period of Uncertainty

Details:
Throughout the United States, local governments are experiencing sus-tained and mounting financial difficulties. As fiscal pressures edge upward, cities of all sizes are finding it difficult to make ends meet. And while the most acute financial hardships are felt by the nation’s older, declining in-dustrial complexes, the need to reduce spending, cut services, improve pro-ductivity and increase locally-raised revenues has been recognized by a steadily growing number of municipalities across the country. Local governments have entered an age of austerity wherein traditional notions of budgeting and service provision have been brought into question. Not only have elected officials and financial managers begun rethinking the manner in which scarce resources are allocated, they have also given sig-nificant attention to the ways in which revenues are generated. This text identifies eight principal areas of concern to municipal officers who must, as a matter of law or as a reflection of political reality, hold down taxes while maintaining adequate and acceptable levels of public ser-vice. As a starting point, the current financial position of local governments is reviewed.