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Structuring Healthy Communities
The PEL report analyzed municipal revenue from 1970 through 2003, found a systemic decline in the fiscal health of communities statewide. This decline cuts across all types of municipalities, in rural, suburban and urban areas, and in all regions of the state. It already impacts more than half of Pennsylvanians where they live, and without new tools for community leaders, it’s only a matter of time for the rest of the state.
(
Pennsylvania Economy League
, March 2007).
The Economy League study shows that municipalities are having an increasingly difficult time providing the services that residents need and expect, and that this fiscal distress is often inevitable under the laws that apply to local governments.
The analysis identified several stages that municipalities follow toward fiscal distress. While new development brings prosperity with low taxes, what often follows is increasing demand for services, along with increasing tax rates and service fees to fund them. Next comes reductions in non-core services, then reductions in core services, and finally loss of tax base and distress as households begin to "vote with their feet" by relocating, often to newer and more prosperous areas.
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