| Abstract: | City governments were better prepared to face the 1990–1992recession than were state governments, and they adjusted theirbudgets with relatively less fanfare. The absence of widespreadbankruptcy notwithstanding, the fiscal position of cities hasdeterioratedandsome ofthe necessary adjustments were painful.Services were reduced as real per capita expenditure growthdeclined, taxes were increased, and the entire local governmentsector remained in deficit during the past six years. The problemhas not been softened by federal or state policies; in fact,the flow of both federal and state aid slowed markedly duringthe late 1980s. A combination of economic and social forcessuggests that many of the nation's older cities will not outgrowthis fiscal stress and their budgetary well-being will be moredependent on state and federal policies. |
