HD4 - Local Fiscal Stress and State Aid
Executive Summary: House Joint Resolution 105 of the 1982 Session of the General Assembly and House Joint Resolution 12 In 1983 directed the Joint Legislative Audit and Review Commission (JLARC) to study State mandates on local governments and the financial condition of local governments. JLARC's response to these resolutions was the 1984 report, State Mandates on Local Governments and Local Financial Resources, which offered recommendations for legislative and executive consideration. Subsequent to the publication of the Mandates report, considerable interest was expressed in further information on local fiscal stress and State aid to localities. This report addresses these two issues. First, it expands the initial stress analysis to cover two additional years, FY 1982 and FY 1983. Some technical adjustments have also been made to the calculations. Second, it includes a summary of 1984 and 1985 legislative actions which may impact localities. In the area of local fiscal stress, we found that overall stress did not change. However, a long-term trend of increasing local tax effort ended. Indeed, tax effort declined slightly in FY 1983. Many localities are still severely fiscally stressed, however, and State actions to address local fiscal stress are proposed h Chapter IV of this report. In the area of aid to local governments, the State has taken a number of important steps. In particular, the long-term trend of a declining State share of public education funding was reversed, and current appropriations raise the State share of the educational Standards of Quality to an all-time high. |
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