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Research & Analysis

Report

The Local Squeeze

Falling Revenues and Growing Demand for Services Challenge Cities, Counties, and School Districts

 

Cutting Key Services

From trash pickup and public safety to welfare programs and schools, local services affect residents’ everyday lives. In many places, the recession has put greater strain on government programs by driving up demand. A number of their costs result from state mandates that require localities to provide specific services, such as special education, or to comply with certain reporting or competitive bidding requirements.

Welfare and Social Services

Many counties and some cities administer and partially fund public welfare programs such as cash or food assistance, healthcare, low-income housing, and workforce development. During the recession, the number of Americans in poverty grew to 46 million—a 14 percent increase between 2007 and 2010. In some states, the growth was at least 20 percent.[i] Meanwhile, national unemployment reached a high of 9.6 percent in 2010; by March 2012, it had fallen somewhat to 8.2 percent.[ii]

Profile: Riverside County

At the same time most localities are looking to cut back programs and services, some are being forced to take on new responsibilities. In 2011, California began diverting nonviolent, non-serious, non-sexual offenders to local jails and shifting responsibility for parole violators and parolees to county probation officers. The state is also increasing county responsibility for various mental health programs, drug and alcohol programs, child welfare and foster care, and adult protective services.

With a budget shortfall of $80 million in fiscal year 2012, Riverside County needed a way to pay for these new obligations. The county decided to charge inmates $142 per day for food, healthcare, and other expenses, taking it out of their wages once they are released. The county hopes to raise between $3 million and $5 million in annual revenue.

As in past recessions, all of this has driven demand for local health and safety net programs.[iii] In Racine County, Wisconsin, for instance, participation in programs for rent assistance, energy assistance, Medicaid, Wisconsin Food Shares, and child-care support all grew about 12 percent between 2008 and 2011. In Maryland, the number of residents coming to Harford County for food stamps has more than doubled since 2007.[iv]

But many local offices serving these constituencies are shrinking budgets and staff. For example, overloaded county-based systems in California, Ohio, and Alabama now rely on workers specializing in child protective services to also cover adult cases involving elders and people with disabilities.[v] The New York City Housing Authority has struggled with backlogs in repairing and renovating public housing units. In June 2011, the agency launched a Work Order Task Force to deal with the issue, but 280,000 outstanding repairs remained in the queue at the end of the year.[vi]

Education

Public school resources also are being stretched in the wake of the recession. Rising poverty rates have resulted in more poor students who require greater attention and resources—as evidenced by the number of students receiving federally subsidized lunches, which increased 17 percent since the 2006–2007 school year.[vii] Some school officials also are seeing a growing number of students whose parents choose to send them to public instead of private schools.[viii]

Meanwhile, many schools are receiving less financial support from states. Since 2008, 17 states have reduced per-student funding by more than 10 percent. The impact was buffered by the infusion of about $90 billion in federal stimulus funds for education in 2010 and 2011. [ix] But the expiration of the funds this year leaves local governments on their own in the face of additional reductions in state aid.

Changes in state aid hit some districts harder than others. After Texas enacted $4.3 billion in cuts to school districts in 2012, for example, poorer districts wound up with $800 less per pupil than wealthier ones.[x]

With fewer resources, some school districts have eliminated courses; reduced the school week from five to four days; laid off teachers, support staff, and guidance counselors; or asked families to pay for sports and extracurricular activities.

In Portland, Oregon, class sizes grew as the school district was forced to eliminate teaching positions to balance its budgets in 2010 and 2011. To mitigate the impact, high schools replaced class time with study halls supervised by teaching assistants or other adults.[xi] Similarly, the loss of 5,100 school employees across Pennsylvania, including more than 1,600 teachers, led to larger class sizes and fewer electives, such as foreign languages and music. In fiscal year 2012, the Philadelphia school district—the state’s largest—cut 12 percent of the workforce, eliminated programs, and received a $53 million aid package from the city, funded by property tax and parking fee increases.[xii]

Profile: Stamford, Vermont

The small town of Stamford, Vermont uses the town meeting form of government. Every March, residents gather to approve their upcoming budget. For fiscal year 2013, they had to decide what to keep and what to cut to close a $37,500 shortfall in a $600,000 budget.

Everything was up for debate: cemetery upkeep, computer software, firefighters, all-day kindergarten, the library, and an after-school program. The town considered closing the elementary school and paying the tuition for students to attend elsewhere. The closest school was in Massachusetts, though, and high transportation costs and the legal issues of crossing state lines made the proposal untenable. At a later meeting, the town board decided to close the gap with a $40,000 transfer from their highway fund balance.[xvi]

Some responsibilities are out of their hands. “We have contractual obligations,” treasurer Dave Fierro, Jr. told the North Adams Transcript in March, “and the other item is health insurance, which is out of our control.”[xvii] Federal and state regulations also required the town to build a $200,000 facility to prevent salt from filtering into waterways. The town has resisted, in spite of potential fines.

Public Safety

Maintaining safe streets is another critical responsibility for most cities and counties. With budgets increasingly tight, local leaders have begun weighing the costs and, in many cases, trimming services.

Foley, Minnesota, near Minneapolis, stopped paying nearby Benton County Sheriff’s deputies to patrol streets, replacing them with private security guards who, while cheaper, do not have the authority to investigate crimes or make traffic stops.[xiii] Los Angeles’ budget for fiscal year 2012 cut overtime pay for police by $80 million, and eliminated ambulances and fire trucks at one in four fire stations throughout the city.

Nearly two-thirds of finance officers said that public safety costs have increased in recent years, putting pressure on city budgets, according to a 2011 survey by the National League of Cities.[xiv] Some counties have seen costs rise even though crime rates have remained constant or even declined during the recession; among other reasons, offenders spend more time in jail because they have less money to pay bail or because public employee layoffs cause backlogs in criminal trials. [xv]  

Other Services

A range of other day-to-day responsibilities long provided by local government also have been hit, taking a toll on residents’ quality of life. Services such as trash pickup, park maintenance, and library programs are now often on the chopping block.

The small town of Belvidere, New Jersey, for instance, opted in early 2012 to cut garbage collection entirely, but still faced a projected deficit of $250,000.[xviii] Residents now have to haul their own trash to the landfill or pay for private service. Trash collection also has had an unexpected impact on Tampa, Florida, where foreclosures and hard economic times have translated into less volume dumped in the city’s incinerator, reducing the revenue from that facility. Local officials have maintained regular trash services, but only by imposing a 15 percent fee increase.[xix]

As Dallas closed a $130 million budget shortfall for fiscal year 2011, it cut its workforce by 450 employees—nearly 4 percent of the total—with more than half from the parks department. As a result, park maintenance was performed less frequently and recreation centers reduced their hours.[xx]

Cities across the country are struggling to keep libraries staffed and open, even as the numbers of visitors climb. Since the start of the recession, Phoenix laid off a quarter of its full-time library staff and trimmed hours by nearly 40 percent. When budget gaps grew in Philadelphia in 2008, Mayor Michael Nutter’s (D) proposal to close 11 of the city’s 49 library branches sparked public outcry, protests, and litigation. Nutter backed down, calling the attempt his “biggest mistake” as mayor. But the city still reduced library funding by nearly 20 percent over the next two years.[xxi]

References

 

Executive Summary

[i] All data in real, inflation-adjusted terms. According to U.S. Census definitions, federal funds passed through states to localities are considered intergovernmental revenue or “state aid” to local governments. Any federal funds from the American Recovery and Reinvestment Act (ARRA) passed to localities through states are captured in this intergovernmental revenue data. Between 1987 and 2009, federal grants that did not pass through the state, but that flowed directly to localities, made up an additional 3 to 4 percent of local expenditures. Pew Center on the States analysis of U.S. Census Bureau “Annual Survey of State Government Finances.”

[ii] Pew Center on the States analyzed survey responses from state legislative and governor’s offices on whether the state cut local assistance. The two sources did not always coincide, possibly due to definitional differences or reporting discrepancies between the offices. Pew reported a cut if either the legislative or governor’s office reported a cut. National Conference of State Legislatures Survey of Legislative Budget Offices, March 2011; National Governors Association and National Association of State Budget Officers, The Fiscal Survey of States, Fall 2010 and 2011.

[iii] Property tax receipts in 2010 and 2011 decreased in nominal terms as well, by $4.8 billion and $529 million respectively. 2010 was the first decline in nominal terms since 1979. All years are fiscal years. Pew Center on the States analysis of U.S. Census Quarterly State and Local Tax Survey; National League of Cities, Cities Cut Jobs and Infrastructure as Finances Continue to Weaken, September 27, 2011.

[iv] Pew Center on the States analysis of Bureau of Labor Statistics National Employment, Hours, and Earnings Database. Seasonally adjusted local employment has fallen from 14.6 million in September 2008 to 14.1 million in December 2011.

A Drop in Key Revenues

[i] The cut was applied to fiscal years 2011 and 2012, but with 2011 already under way, the change effectively altered the 2012 budget cycle. City of Cleveland, “State Imposes Budget Deficit on City of Cleveland,” May 16, 2011; City of Cleveland, “2011 Budget Book,” March 28, 2011, page 16.

[ii] City of Cleveland, “State Imposes Budget Deficit on City of Cleveland,” May 16, 2011; Tracy Carloss, “Cleveland mayor says all departments affected by city layoffs,” Newsnet5, May 16, 2011.

[iii] Lisa Allmendinger, “Saline School Board approves ‘structurally deficient’ $51.5 million operating budget for 2011 – 2012,” AnnArbor.com, June 29, 2011.

[iv] In 2011, more than 5 percent of homeowners in the Stockton Metro Area filed for foreclosure. “2011 Year-End Foreclosure Report: Foreclosures on the Retreat,” RealtyTrac, January 9, 2012; Alison Vekshin, “Stockton Going Broke Shows Cop Pay Rising as Property Collapsed,” San Francisco Chronicle, March 8, 2012.

[v] City of Stockton Comprehensive Annual Financial Report, June 30, 2010, page 188–189.

[vi] Pew Center on the States analyzed historical trends in property tax receipts and intergovernmental transfers from states to localities. Adjusting for inflation, at least one of these revenues grew each year from 1981 to 2009. Census State Government Finance Database, the U.S. Census State and Local Government Finance Database, and the U.S. Census Quarterly Tax Survey.

[vii] Pew Center on the States analysis of U.S. Census State and Local Government Finance Database.

State Aid

[i] U.S. Census Bureau, “Local Governments and Public School Systems by Type and State,” 2007.

[ii] Christopher Hoene and Michael A. Pagano, “Cities & State Fiscal Structure,” Research Report on America’s Cities, National League of Cities, 2008.

[iii] Lucy Dadayan, “Tax Revenues Surpass Previous Peak But Growth Softens Once Again,” The Nelson A. Rockefeller Institute of Government, State Revenue Report, April 2012.

[iv] Pew Center on the States analysis of U.S. Census data on Historical State Tax Collections by State; National Conference of State Legislatures, State Budget Update, Fall 2011, page 1.

[v] Rob Gurwitt, “As states cut aid, localities learn to do less with less,” Stateline, October 3, 2011.

[vi] U.S. Census Bureau State and Local Government Finance Database.

[vii] Pew Center on the States analysis of U.S. Census State Government Finance Database. For many reasons, comparing transfers from the state to localities is challenging. Constitutional requirements regarding K–12 education funding, state mandates for certain social services and statutory oversight of local fiscal stress all vary across states. Additionally, states may have different relationships depending on the type of locality, as cities, counties, and school districts are often engaged in very different functions.

[viii] City of Phoenix Arizona, Comprehensive Annual Financial Report, 2011, page 218; Jay Weiner, “Even small cuts in state aid can cause big problems for Minnesota’s small towns and counties,” MinnPost, October 27, 2010.

[ix] State aid declined by $574 million in Arizona, $5,715 million in California, $927 million in Minnesota, $498 million in New Mexico, $214 million in Nevada, $2,199 million in Texas, $1,016 million in Virginia, and $185 million in Wyoming. All amounts are in 2010 dollars. Pew Center on the States analysis of U.S. Census State Government Finance Database.

[x] Phil Oliff, and Michael Leachman, “New School Year Brings Steep Cuts in State Funding for Schools,” report by Center on Budget and Policy Priorities, October 7, 2011.

[xi] As a result, aid from the state in Florida went from covering 27 percent of local expenditures in 2000 to just 19 percent in 2009. Pew Center on the States analysis of U.S. Census State and Local Government Finance Database.

[xii] In 2000, transfers from states to localities totaled $327 billion, compared to local expenditures of $996 billion. By 2009, transfers had grown to $491 billion, but it was not enough to keep pace with local expenditures, which climbed to $1.641 trillion that year. Pew Center on the States analysis of U.S. Census State and Local Government Finance Database.

[xiii] National Conference of State Legislatures Survey of State Legislative Fiscal Offices, March 2011; National Governors Association and National Association of State Budget Officers, The Fiscal Survey of States, Fall 2010 and 2011.

[xiv] Rob Gurwitt, “As states cut aid, localities learn to do less with less,” Stateline, October 3, 2011.

[xv] Department of Legislative Services, Maryland, Overview of State Aid to Local Governments Fiscal 2012 Allowance, January 2011.

[xvi] David Teal, “Unfunded Liability in Alaska’s Retirement Systems: Where it Came From and How to Eliminate It,” Legislative Finance Division, Alaska, September 2011; Pew Center on the States interview with David Teal, Director of Legislative Finance Division, January 27, 2012.

[xvii] Elizabeth McNichol, Phil Oliff and Nicholas Johnson, “States Continue to Feel Recession’s Impact,” Center on Budget and Policy Priorities, March 21, 2012; Pew Center on the States analysis of U.S. State and Local Government Finance Database.

The State-Local Relationship

[i] Rob Gurwitt, “As states cut aid, localities learn to do less with less,” Stateline, October 3, 2011; Ohio Legislative Service Commission, Budget in Brief, HB 153 as Enacted, page 3.

[ii] Kenny Walter, “Christie touts shared services at town hall meeting,” Alanticville, March 15, 2012.

[iii] Anna Whitney, “Districts Avoid School Finance Lawsuits, Cite Finances,” The Texas Tribune, April 3, 2012; Sharie Harvin, “CCSD School Board President Wants to Sue State” 8NewsNOW, March 19, 2011; Claudio Sanchez, “Texas Schools Grapple with Big Budget Cuts,” National Public Radio, December 22, 2011.

[iv] Pew Center on the States interview with Gary Carlson, Intergovernmental Relations Department, League of Minnesota Cities, December 20, 2011; Minnesota Department of Revenue, “2011 First Special Session Chapter 7,” July 20, 2011. Pew calculations determined the total reduction in appropriated funds by the state to cities and counties in fiscal year 2011 and confirmed the data using Minnesota Department of Revenue documents provided by an official at the League of Minnesota Cities.

[v] Claudio Sanchez, Texas Schools Grapple With Big Budget Cuts, National Public Radio, December 22, 2011; Cynthia Cisneros, “Pasadena ISD hit hard by budget cuts,” ABC13, KTRK-TV, Houston, Texas, August 19, 2011.

[vi] Cherryl H. Lee, Robert Jesse Willhide, and Nancy I. Higgins, “State Government Finances Summary: 2010,” Government Division Briefs, U.S. Census Bureau, December 2011.

Property Taxes

[i] Federal Funds Information for States, “State-by-State Analysis of BCA Sequester,” FFIS Special Analysis 11-06, December 2, 2011; “The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit,” Congressional Budget Office, July 14, 2011.

[ii] Property taxes represented about 29 percent of all local government revenues, over $400 million, in 2009. This was by far the largest source of revenue from taxes. These shares are even higher for townships and school districts. U.S. Census Survey of State and Local Government Finances.

[iii] The decline from Q4 2009 to Q4 2010 was the largest in real and nominal terms since 1988. Pew Center on the States analysis of U.S. Census Bureau State and Local Quarterly Tax Summary Data, inflation adjusted. To reflect differences in the Census Bureau’s survey methodology for property tax revenue data, property tax revenue prior to the fourth quarter of 2008 has been adjusted upward by 7.7 percent; this is in accordance with the changes described in the Bureau’s bridge study. To read the full bridge study, please refer to: www2.census.gov/govs/qtax/bridgestudy.pdf.

[iv] Richard Dye and Andrew Reschovsky, “Property Tax Responses to State Aid Cuts in the Recent Fiscal Crisis,” prepared for State and Local Finances After the Storm: Is Smooth Sailing Ahead?, March 30, 2007. 

[v] Federal Housing Finance Agency Home Price Index.

[vi] Homes were sold off between December 2006 and May 2010. Laurie Goodman, “Dimensioning the Housing Crisis,” Financial Analyst Journal, Vol. 66, No. 3, May/June 2010.

[vii] Some academic studies have found relationships between vacant or foreclosed properties and crime. William C. Apgar, Mark Duda, and Rochelle Nawrocki Gorey, The Municipal Cost of Foreclosures: A Chicago Case Study, Housing Finance Policy Research Paper 2005-1, Homeownership Preservation Foundation (Minneapolis, Minn.: 2005); Christiana McFarland, Casey Dawkins, and C. Theodore (Ted) Koebel, “Local Housing Conditions and Contexts: A Framework for Policy Making” (Washington: National League of Cities, 2007); and Dan Immergluck and Geoff Smith, “The Impact of Single-family Mortgage Foreclosures on Neighborhood Crime,” Housing Studies 21, no. 6 (2006): 851–866.

Rate Changes and Limits

[i] Moody’s Analytics regularly updates their forecasts. In September 2011, they predicted that absent policy change average property tax revenues will decrease by 4.4 percent in 2012. Dan White, “Timing is Everything,” Government View: State & Local, Moody’s Analytics, June 2012; Moody’s Analytics, U.S., Regional, and Southeast Economic Outlook presentation, Washington, D.C, September 22, 2011.

[ii] According to Moody’s estimates, absent policy change, these states are predicted to see losses in property tax revenue above 5 percent in 2012. In Michigan, California and Florida, declines are forecasted to be greater than 10 percent. Moody’s Analytics, U.S., Regional, and Southeast Economic Outlook presentation, Washington, D.C, September 22, 2011.

[iii] State and Local Governments’ Fiscal Outlook April 2012 Update, United States Government Accountability Office.

[iv] Community Research Partners, “$60 Million and Counting: The cost of vacant and abandoned properties to eight Ohio cities,” February 2008, page 5-4 and 5-47; Rich Exner, “Vacant homes for sale numbered more than 20,000 in greater Cleveland: Sunday’s numbers,” Cleveland.com, May 15, 2011.

[v] This amounts to approximately $7,775 per property. Community Research Partners, “$60 Million and Counting: The cost of vacant and abandoned properties to eight Ohio cities,” February 2008, page 5-22, 47.

[vi] David McSwane, “City of Sarasota will raise property tax rates” Herald-Tribune, September 20, 2011.

[vii] Between 2009 and 2010 the total assessed valuation of property in Washington fell by 6.2 percent, but levies increased 1.8 percent. To achieve this, the statewide average tax rate rose from $9.41to $10.28 per $1,000. Tom Christensen and Beth Leech, “Property Tax Statistics 2010,” Department of Revenue, Washington State, accessed January 27, 2012.

[viii] Proposition 13 was the first and most famous outcome of the property tax revolts of the late 1970s and early 1980s. The proposition was passed on June 6, 1978. It rolled back assessment values to 1976 levels and limited growth in these values at 2 percent per year while ownership remained the same. The proposition also imposed a 1 percent limit on the property tax rate. The measure was approved with the support of two thirds of Californians. See Bing Yuan, Joseph Cordes, David Brunori, and Michael Bell, “Tax and Expenditure Limitation and Local Public Finance,” in Erosion of the Property Tax Base: Trends, Causes and Consequences edited by Nancy Y. Augustine, Michael E. Bell, David Brunori, and Joan M. Youngman, Lincoln Institute of Land Policy, 2009; Pew Center on the States analyzed data on revenue limits that set the maximum rate of growth for total revenue or spending, levy limits that cap total property tax collections, rate limits that set a ceiling on the rate at which properties are taxed, and assessment limits that cap the share of property considered taxable from the Significant Features of the Property Tax, Lincoln Institute of Land Policy and George Washington Institute of Public Policy, 2010.

The Impact

[i] “Governor signs property tax relief and reform bill,” State of Indiana Office of the Governor, Mitchell E. Daniels Jr., News Release, March 19, 2007; “Historic Property Tax Cap Becomes Law,” New York State Senate, Press Release, June 30, 2011.

[ii] Pew Center on the States Interview with Frank Shafroth, director of the Center for State and Local Government Leadership at George Mason University, April 20, 2012.

[iii] By contrast, states spent only 13 percent of their budget on employees that year. U.S. Census Bureau State and Local Government Finance Database.

[iv] Seasonally adjusted local employment has fallen from 14.6 million in September 2008 to 14.1 million in December 2011. Pew Center on the States analysis of Bureau of Labor Statistics National Employment, Hours, and Earnings Database.

Cutting Key Services

[i] Nevada had the largest relative drop in local government employment of all states. The loss in California amounted to 5.1 percent of the total workforce. Texas added 22,000 local workers, but 1.4 million residents. Pew Center on the States analysis of Bureau of Labor Statistics State and Metro Area Employment, Hours, and Earnings Database.

[ii] U.S. Census Bureau, Current Population Survey, 2008 to 2011, Annual Social and Economic Supplements.

[iii] U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics; “Regional and State Employment and Unemployment – March 2012," Bureau of Labor Statistics, April 20, 2012.

[iv] U.S. Government Accountability Office, “State and Local Governments: Knowledge of Past Recessions Can Inform Future Federal Fiscal Assistance,” GAO-11-401, March 31, 2011.

[v] Jonathan Delagrave, director of the Human Services Department, reported statistics on Racine County’s safety net programs. Lindsay Fiori, “Racine County children faring badly in recession, too,” The Journal Times, September 23, 2011; Allison Trobiano, “Harford families need $62,000 to cover basic costs, study says,” The Baltimore Sun, February 23, 2012.

[vi] Melissa Maynard, “Anatomy of a backlog: How Vermont fell behind on adult protective services,” Stateline, December 14, 2011. See the Stateline series “Backlogged” at http://www.pewstates.org/projects/stateline/special-features/backlogged-the-growing-wait-for-state-services-85899374142 for more information on how agencies at the state level also have struggled with this experience.

[vii] Chris Le, “An Uphill Battle: City Cuts Into Backlog of Public Housing Repairs,” The Uptowner, December 20, 2011.

[viii] Localities with a high fraction of at-risk students have high costs; it has been estimated that “the cost of providing a given output is 9.69 percent higher if 10 percent of a district’s students are poor than if none are poor.” Thomas A. Downes and Thomas F. Pogue, “Adjusting School Aid Formulas for the Higher Cost of Educating Disadvantaged Students,” National Tax Journal, 47.1 (1994); Sam Dillon, “Lines Grow Long for Free School Meals, Thanks to Economy,” The New York Times, November 29, 2011.

[ix] From 2006 to 2010, public schools saw an increase of 1.5 percent, while private school enrollment decreased by 2.91 percent, according to enrollment data from the U.S. Department of Education. Greg Toppo, “Recession fuels shift from private to public schools,” USA Today,  January 6, 2010.

[x] P. Oliff and M. Leachman, “New School Year Brings Steep Cuts in State Funding for Schools,” report by Center on Budget and Policy Priorities, October 7, 2011; Recovery.gov: Track the Money, “Contract, Grant and Loan Programs,” http://www.recovery.gov/Transparency/fundingoverview/Pages/contractsgrantsloans-details.aspx#Education, accessed March 19, 2012. Total education funds paid out figure is updated frequently. Amount reported in the brief is from March 19, 2012.

[xi] Claudio Sanchez, “Texas Schools Grapple With Big Budget Cuts,” National Public Radio, December 22, 2011.

[xii] Molly Hottle, “Portland Schools to see widespread layoffs, but deeper cuts to PE and high schools avoided for now,” The Oregonian, July 20, 2010; Betsy Hammond, “Portland School Board OKs budget that flat-funds schools, cuts 70 teaching jobs,” The Oregonian, May 24, 2011.

[xiii] Associated Press, “Nearly 70 percent of Pa. school districts increased class sizes, survey shows,” September 16, 2011; Associated Press, “When Pa. cut school aid, poorer districts lost,” August 7, 2011.

[xiv] Nate Berg, “Privatizing Police Work,” The Atlantic,October 21, 2011.

[xv] National League of Cities, City Fiscal Conditions in 2011, September 2011.

[xvi] Pew Center on the States interview with Jacqueline Byers, Director of Research, National Association of Counties, November 21, 2011.

[xvii] Rob Gurwitt, “In California, a state and local war over revenues and responsibilities,” Stateline, October 5, 2011.

[xviii] Phil Willon, “Riverside County to make inmates pay jail costs,” Los Angeles Times, November 20, 2011, accessed March 6, 2012; Aaron Smith, “California county to charge prisoners for their jail stay,” CNNMoney, November 9, 2011.

[xix] Lynn Olanoff, “Belvidere still faces 13 percent tax increase despite garbage cut,” The Express-Times, February 9, 2012.

[xx] Kevin Wiatrowski, “Tampa leaders work to bolster solid waste finances,” The Tampa Tribune, March 1, 2012.

[xxi] Rudolph Bush, “Dallas city manager expects to cut 500 jobs,” Dallas Morning News, July 15, 2010; Jason Whitely, “450 City of Dallas workers get layoff notices,” WFAA Dallas, August 6, 2010.

[xxii] The Library in the City: Changing Demands and a Challenging Future, The Pew Charitable Trusts Philadelphia Research Initiative, March 7, 2012. www.pewtrusts.org/our_work_report_detail.aspx?id=85899373217.

[xxiv] Tammy Daniels, “Stamford rejects school budget, cuts town budget,” iBershires.com, March 6, 2012; Town of Stamford Selectboard Meeting Minutes, March 15, 2012.

[xxv] Meghan Foley, “Stamford’s budget hits snag,” North Adams Transcript, March 7, 2012.

Other Options

[i] The New Jersey Privatization Task Force, Report to Governor Chris Christie, May 31, 2011, page 1.

[ii] Motoko Rich, “A Hidden Toll as States Shift to Contract Workers,” The New York Times, November 6, 2011; Leonard Gilroy, Harris Kenny, Katrina Currie, and Elizabeth Stelle, “Privatizing ‘Yellow Pages’ Government,” The Commonwealth Foundation and the Reason Foundation, May 26, 2011.

[iii] The jury is still out on whether these measures save money without compromising the quality of services. Empirical studies show that privatization of local waste and water management is not systemically cost saving. Consolidation can save in one area, but generate new costs in other areas, balancing out the net effect. Germà Bel and Mildred Warner, “Does privatization of solid waste and water services reduce costs? A review of empirical studies,” Resources, Conservation and Recycling, 52 (2008) 1337–1348; Daniel Vock, “Governors look to consolidate, eliminate, follow lead of Depression-era leaders,” Kennebec Journal Morning Sentinel, February 23, 2009; Examples of recent consolidations from Brian Heaton: “2011 Digital Cities Survey Winners Announced,” Government Technology, November 2, 2011; “Washoe County and the Cities of Sparks and Reno, NV Initiate One-Stop Shop for Business License,” International City/County Management Association, November 21, 2011.

[iv] “Online Inmate Information and Jail Visit Reservation,” 2009 Finalist, Innovations in American Government Awards, Ash Center for Democratic Governance and Innovation.

[v] Sarah Rich, “Light Monitoring System Keeps Glendale, Ariz. Out of the Dark,” Government Technology, October 24, 2011.

[vi] Minneapolis Mayor’s Office News Center, “Mayor, Council President Propose Contingency Funds to Mitigate State LGA Cut,”August 9, 2010.

[vii] “The Recession Continues: An Economic Status Survey of Counties,” National Association of Counties, March 2011.

[viii] Michelle Conlin, “States and cities selling public assets to cover their costs,” Associated Press, March 13, 2011.

[ix] Darrell Preston, “Morgan Stanley Group’s $11 Billion Makes Chicago Taxpayers Cry,” Bloomberg News, August 9, 2010.

Long-term Obligations

[i] Tamara Keith, “Harrisburg, Pa., Incinerator Burns Hole in City Pocket,” National Public Radio, June 21, 2010.

[ii] Ted Nesi, “Why Central Falls owes its retirees $80 million in benefits,” WPRI.com Eyewitness News, July 19, 2011; Dee DeQuattro, “Judge approves agreement between receiver and retirees,” 630WPRO.com, January 9, 2012.

[iii] Presentation by Bob Kurtter, Moody’s Investor Service, U.S. Municipal Credit Update, Charlotte, North Carolina, March 31, 2011, page 3.

[iv] The Pew Center on the States, “Harrisburg and a Brief History of Municipal Bankruptcies,” October 19, 2011.

[v] Pennsylvania Senate Bill 1151 amended the state’s fiscal code to prevent cities of the third class from declaring bankruptcy, General Assembly of Pennsylvania, Senate Bill 1151, Session of 2011; Pennsylvania Office of the Receiver of the City of Harrisburg, “About the Office of Receiver,” accessed April 30, 2012, http://www.portal.state.pa.us/portal/server.pt?open=514&objID=1052658&parentname=ObjMgr&parentid=5&mode=2.

[vi] State of Michigan Department of the Treasury, Emergency Manager Information, http://www.michigan.gov/treasury/0,1607,7-121-1751_51556-201116--,00.html, and Summary of the Local Government and School District Fiscal Accountability Act Process, http://www.michigan.gov/treasury/0,1607,7-121-1751_51556-198770--,00.html. 

[vii] “2011 Sector Outlook for U.S. Local Governments: Toughest Year Yet,” Moody’s Investor Service, March 17, 2011.

[viii] Moody’s Investor Service, “Munis’ Tough Conditions Likely to Endure,” MuniMonitor, December 5, 2011, page 3; Moody’s Investor Service, “U.S. Municipal Rating Revisions Through the Great Recession,” Special Comment, August 31, 2011; Moody’s Investor Service, “U.S. Public Finance: Third Quarter Sets New Peak for Ratio of Downgrades to Upgrades,” Special Comment, November 1, 2011.

Report Assets

Date:
June 1, 2012
Contacts:
Jeremy Ratner | 202.540.6507
Project:
American Cities Project
Issues:
Revenue and Spending, Economy, Cities, Government Performance
State:
National

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