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localities to weather the past storm.
Cities and counties depleted their cash reserves to get by financial crisis without raising taxes excessively and, as a result, have no "cushion,” according to Lacy. In addition, he said, local governments are not receiving interest rate income that reserves drew. He noted that local revenues derived from interest rates had dropped 16.8 percent.
In another move to counterbalance crisis pressures, localities deferred capital expenditures. “Those things are going to catch up six to eight years down the road,” Lacy warned.
Many localities manipulated tax deadlines so they could get money earlier, he continued, “That’s a well you can go to only once,” he said.
Trends In Financing
Lacy reported that localities were depending more and more on federal dollars to fund government. In 1950, 10.4 percent of
82.1%