Some states cut, cap local government funding

As a way to balance budgets in a down economy, several states have cut direct funding for local governments in the past several years, leaving local officials searching for ways to balance their own budgets without millions of dollars on which they've previously depended. Rob Gurwitt reports for Stateline that some states have capped local property taxes, limiting the amount of money cities, counties and towns can raise.

In some cases, lack of funding has forced local government officials to lay off up to 10 percent of their employees, cut police forces, stop paying firefighters overtime and try to get hospitals to take on ambulance services, Gurwitt reports. Other local officials have closed down parks and recreation departments, libraries and public works. Some have raised taxes and fees; Lincoln, Neb., has imposed a "wheel tax" on every vehicle in the city. To see an infographic detailing what funds have been cut from several states, click here.

Local government funds of $665 million were cut in Ohio by a quarter this year; next year, the funds will be cut to half. Gurwitt reports that this move is expected to save the state $400 to $500 million. Nebraska's state government completely cut funds for counties and cities, and Michigan's government has cut local funds by $5 billion since 2000. State governments are not willing to share revenue in these tough economic times, Gurwitt reports, but cutting local government funding is a risk for state governments since most of the state's revenue is made in areas that benefit from local funds. (Read more)