Dave Davies: Local woes could hurt national stimulus

Gov. Rendell with President Obama

Link: Dave Davies: Grim news at the local level [Daily News]

State and local leaders are facing massive budget deficits due to the sorry economy and sagging tax revenues.

And while the federal government can run deficits, most state and local governments are required by law to balance their budgets every year.

So, Washington can react to an economic downturn by borrowing and spending, but the beleaguered souls who manage police departments, parks and libraries are forced to make choices in which everybody loses.

New York City has already raised property taxes, and Mayor Michael Bloomberg is asking for a sales-tax hike too. That's on top of proposed increases in transit fares and bridge tolls.

In Philadelphia, Mayor Nutter has to come up with something like $200 million in savings or revenue over the next 16 months. No doubt there's some waste to cut, and city unions will be asked to help with work-rule and benefit changes.

But it's hard to see how we get out of this mess without a tax increase, whether you call it a trash-collection fee or something else, and real service cuts.

Local tax hikes, of course, will directly blunt the effect of the stimulus bill.