The State Budget Crisis Task Force has issued a report that highlights many of the issues that are placing increasing financial pressure on municipalities.
The report outlines the forces that have converged to limit state revenue at the same time that states are facing an increased demand for social services and escalating costs.
Decreased sales and income tax revenues, cuts in federal funding to states, increasing Medicaid enrollment and costs, underfunded pension and health benefit obligations and overdue investment in education and infrastructure have combined to elevate state budgetary concerns to crisis levels.
The report details how states have been unwilling to take steps to combat (or even admit) the structural nature of their budget challenges using accounting tricks, one-time revenue raisers, spending cuts and deferred payment of mandatory spending commitments to delay the inevitable financial reckoning.
The pressure on state budgets eventually (and inevitably) trickles down to the municipal level, compounding the woes of localities already facing their own intractable budget shortfalls.