|Previous||1 of 11||Next|
The Crisis in Municipal Finances THREE STEPS TO SOUND MANAGEMENT If the family budget is being squeezed today, so are municipal budgets in communities of every size. The numbers, however, are much larger and the reasons more complex. Contributing to the cities' problems are factors such as rising labor costs, demographic change, and the energy shortage, not to mention our seemingly inexhaustible demands for more and better public services of every kind. The budget squeeze exists, even though cities are taking in more money than ever before. Figures gathered during the latest Census of Governments, which is performed every five years by the US Census Bureau, show that in 1971-72 all US municipalities collected general revenues of $35 billion—up 81 percent since 1967 and 270 percent since 1962. Despite recent tax increases of 10-25 percent, however, the US Conference of Mayors reports that a survey of 50 cities shows municipal revenues in 1975 running as much as $8 billion short of expenditures. The result is that we can pick up any newspaper today and read that the application of federal bankruptcy law to the public sector is now being discussed as something of more than theoretical interest. New York City's fiscal crisis has, indeed, called attention to what may be in store for other communities if present trends continue. The following articles shed light on the critical subject of municipal finance. Ted David provides a survey of the basic revenue sources available to urban governments, with commentary on various factors that may affect their suitability in specific localities. An understanding of one's options is essential when deciding the " m i x " of revenue sources that will furnish consistent, reliable financial support. Philip Dearborn addresses the creditworthiness of city governments, arguing that timely payments are the most important criterion. He reviews some indicators that can help to guide one evaluating cash management in any city. In addition, Fred Rohn summarizes the type of information major rating agencies use to arrive at a quality rating for municipal general obligation bonds. 25
Three steps to sound management
How to evaluate revenue sources
How to get a quality credit rating
How to apply for bond ratings
David, Irwin T.
Dearborn, Philip M.
Rohn, Fred H.
Touche Ross. Newark Office
Touche Ross. Chicago Office
|Abstract||Illustration not included in Web version|
Tempo, Vol. 21, no. 2 (1975), p. 25-36
|Source||Originally published by: Touche Ross, & Co.|
|Rights||Copyright and permission to republish held by: Deloitte|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|