Distressed Communities:

Public Services Declined in New Jersey Despite Targeted State Aid

HRD-90-96: Published: Jul 9, 1990. Publicly Released: Jul 9, 1990.

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Pursuant to a congressional request, GAO provided information about the condition of basic public services in poorer communities in New Jersey.

GAO found that: (1) local governments provided the vast majority of public service programs; (2) federal aid to localities declined between 1978 and 1986; (3) New Jersey has made substantial economic progress over the past decade, but not all of the state's communities have shared in the prosperity, and the large fiscal gap between wealthier and poorer communities has grown; (4) municipalities play a key role in the delivery of public services in New Jersey; (5) New Jersey fiscal policies restrict local government revenue sources; (6) state aid to New Jersey municipalities is substantial, but the state could reduce the disparities between wealthier and poorer communities through increased targeting; (7) general revenue sharing (GRS) did not represent a large share of revenues in either of the communities that GAO studied, but local officials regarded those funds as very important; (8) the two communities have high service needs but few resources; (9) the two communities improved their administration and program operations to maintain services with fewer revenues; (10) the two communities used management improvements and tax increases to cope with fiscal distress and the loss of GRS; (11) although state aid favors wealthier communities, New Jersey has taken measures to help its poorest communities; and (12) through the development of new public assistance programs, 1990 state aid to the two communities is significantly greater than their 1986 GRS allocation.

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