State and local fiscal challenges need diversified, system-wide approach.(analysis of state budgets)

Nation's Cities Weekly, July, 2007 by Pagano, Michael A.

The Government Accountability Office (GAO) has recently released a report showing that the state and local government sector faces significant and worsening fiscal challenges in the next decade (see story on page 3). The GAO makes a compelling case. Indeed, the funding structures of the entire intergovernmental system, the interlocking and overlapping interest among levels of government, and the degree of regulatory influence on the fiscal well-being of state and local governments present both a challenge and an opportunity for all levels of government in the federal system to work together.

The nation's municipalities face an array of issues, Among those that have attracted considerable attention are the problems associated with an ever-changing economic...