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Fallout: The Financial Crisis

Local governments feel budget pains

Steve Henn Jul 3, 2009
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Fallout: The Financial Crisis

Local governments feel budget pains

Steve Henn Jul 3, 2009
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TEXT OF STORY

Several states are set to bring in Independence Day without a budget. From California to Ohio, Pennsylvania — the list of states in the midst of a major budget breakdown is pretty long. Government shutdowns, massive state tax hikes, or debilitating service cuts are all on the table. And as Marketplace’s Steve Henn reports — local government are about to feel the pain.


STEVE HENN: It’s been a tough year for many counties and cities. Property tax revenue is crumbling, while demand for socials services is soaring. But Chris Hoene at the National League of Cities says the these problems are likely to get worse as state governments across the country grapple with their own crippling financial problems.

CHRIS HOENE: Well it is trickling down — I think the depths of the recession and the impact on state budgets, which is severe, inevitably means that local program are likely to bear some of the burden.

Across the country, Hoene says education is likely to be particularly hard hit. But Bill Euille, the mayor of Alexandria, Va., says education cuts are tip of the iceberg.

BILL EUILLE: Reductions in pension funding, reductions in funding for public safety, sheriff and court services, and mental health and health programs.

Hoene says that local leaders have a couple unappealing choices — either raise taxes or cuts services dramatically.

In Washington, I’m Steve Henn for Marketplace.

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