Much has been said about the increasing debt, unfunded pensions, unaffordable employee
and retiree health care, and the aging,
undermaintained infrastructure that
have created ongoing financial stress
at all levels of government. By now it
should be clear that some irrefutable
facts must be addressed if states and
nearly 90,000 local governments in the
U.S. are to recover from the ongoing
financial stress many of them face.
operating revenues and expenses that
indicate foreseeable stress. These are:
1 Declining populations in cities and/or population shifts within
2 Structural inefficiencies of the many existing and overlapping
layers of governments.
Four fundamental mega trends affect
almost every local government,
particularly cities and counties that
are already in financial stress or that
have serious structural imbalances of
3 Aging baby boomers, 3. 5 million of whom will turn 65 each year for
the next 15 years.
4 An eroding tax base that does not reflect the 21st century economy.
These seismic socioeconomic
trends will continue to affect local
governments’ ability to deliver vital
services while living within their
means. Although these continuing
trends are not recent discoveries—
they existed before the recessions
of the 2000s, but were exacerbated
by those economic downturns—
only a few communities and states
have begun to address them in a
meaningfully way. Other governments
have made attempts to address the
problems, but proposed solutions
generally have failed to survive the
resulting partisan political tussles.