State and Local Government: The Challenges of the Fiscal Relationship

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State and Local Government The Challenges of the
Fiscal Relationship
900 Lydia Street - Austin, Texas 78702 Phone
[phone] fax [phone] - www.cppp.org

• NALEO Policy Institute on Sustainable Communities
• August 5, 2005
• Dallas, Texas
• Eva DeLuna Castro, Budget Analyst
  (deluna.castro_at_cppp.org)

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Outline

• How Federal Funding of State Services is Changing
• How Federal and State Funding of Local Services
  is Changing
• Focus on Selected Levels of Government, and on
  Certain Cities
• Implications for Sustainability

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Key Issues That Emerge

• Federal funding still critical (to states)
• Governments responsible for health carenot just
  Medicaid, but also as an employee benefitare
  seeing this area grow faster than their revenue
  systems can handle
• Employee retirement/pensions also putting
  pressures on states and localities
• Economic development strategies (incentives) have
  to be designed in ways that dont further erode
  the ability of public revenue systems to fund
  basic services, while creating more need for
  those services
• Demographic trends may make these challenges
  harder to tackle than in past eras also make it
  riskier to postpone them to another day