Distressed Communities:

Public Services Declined in California as Budget Pressures Mounted

HRD-90-95: Published: Aug 16, 1990. Publicly Released: Aug 16, 1990.

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Pursuant to a congressional request, GAO reviewed the effects of changing federal-local fiscal relations on the condition of basic public services in two distressed California counties, focusing on: (1) local efforts to cope with declining federal aid and the loss of general revenue sharing; and (2) whether state policies helped to offset those circumstances.

GAO found that: (1) since 1980, federal aid to municipalities and counties declined substantially, and Congress terminated a general revenue sharing program in 1986; (2) poorer California counties have been more adversely affected by shrinking federal support, revenue limitations, and the rising cost of state-mandated programs; (3) the counties cut services and postponed capital investments when service needs exceeded revenues; (4) state policies that limited sales taxes constrained county revenues; and (5) poorer California counties coped with local public services problems largely on their own.

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