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Budget deficits

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by aldanatech

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It was reported this week in a local newscast that my county has a $7 million dollar deficit that will lead to the close down of several health centers, libraries, parks, and community outreach programs, which will then lead to hundreds of lay-offs by the end of the year. The local authorities would not explain the reason for the deficit, but residents suspect that the funds were either mismatched by the government or redirected to war in Iraq. The point is that I would like to know if something like this is happening elsewhere in the country. Is your hometown or city in red figures or experiencing lay offs due to budget cuts?

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by thechas

You and I are both experiencing the impact of trickle down economics on government funding.

My city government has lost a large portion of state and federal revenue sharing. Coupled with the defeat of tax increase to "maintain" the present level of services, we are facing the closure of 2 fire stations along with a significant reduction in both the fire and police departments.

Here's what is happening:

One of the few budget cuts that GWB has made was to reduce federal revenue sharing.
Both your state and local government are getting less funding from Washington.

State and local governments use a mixture of Income, Property and Sales taxes as a source of funding.
Sales tax receipts are down nationwide.
Income levels continue to drop as the workforce shifts to lower paying jobs.
With low inflation, property tax revenue is nearly flat.

Another factor that I find intriguing, but do not fully understand, is that as an area grows in population, it costs more per person to provide government services.
One interim city manager that we had reported that property tax revenue from new homes only accounted for 80% of the cost of providing city services to these new homes.

Coupled with this, states are spending more on unemployment, health services, and welfare. In part from the weak economy. In part because of the impact to families of Reservists and Guard members who have lost significant amounts of income.

Chas

by aldanatech

I see. Now that you mention it, the County director of one of the community outreach programs did say something about insufficient state and local funds. Also, a considerable amount of schools have a shortage of teachers because many were reservists and were deployed to Iraq. I hope we can overcome these inconveniences soon enough.

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