Fend-for-yourself federalism: the impact of federal and state deficits on America's cities.

The largest federal and state fiscal crisis in decades is trickling down to city governments, making it increasingly difficult for city officials to balance their own budgets. (1) Faced with $110 billion in state budget shortfalls for fiscal years 2003 and 2004, state governments cut aid to cities for the first time in more than a decade. (2,3) At the federal level, the budget deficit is fast approaching $500 billion dollars because of tax cuts and increased spending. The fiscal relief package passed in May failed to address the needs of cities and their residents or to provide funding for No Child Left Behind Act and homeland security mandates.

These actions ...