Word: localizing
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Dates: during 1960-1969
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HOWEVER, there are more substantive reasons why a crisis atmosphere prevails. Accepting the skeptics' point that there is presently a disproportionate amount of wealth in metropolitan areas, one cannot overlook the dynamics of annually balancing the local budget. Things do tend to get worse over time. This is explained by the relatively simple concept of a "fiscal gap" or a "fiscal imbalance...
...fiscal gap" is said to occur when, as metropolitan income rises, revenue from a given local tax structure (at fixed rates) grows more slowly than expenditures required for a given program structure (at fixed quality). In "economies," the elasticity of taxes with respect to income is less than the elasticity of expenditures...
Prof. Gerald Boyle of the University of New Mexico has estimated aggregate elasticities for state and local governments between 1956 and 1966. What he found would not surprise any urban mayor, particularly John Lindsay. With every one per cent increase in income, expenditures grew by 1.1 per cent while revenue grew by only 9 per cent...
What this implies is that with any constant-quality public service package and at any tax rate level (with the present mixture of state and local taxes), given sufficient time, costs will exceed tax revenue. The situation for New York, however, is even worse than the average American city...
This fiscal gap substantially accounts for the "political theatre" of the "battle of the bulging budget." The tendency for costs to exceed taxes requires periodic adjustments to annually balance the local budget (as required by law), either by downgrading program quality, raising tax rates, or increasing dependence on outside aid. Usually some combination of all three types of adjustment is used, leading to cries of distress from three overlapping groups: public service recipients, City taxpayers, and State (and to a much lesser extent, Federal) taxpayers...