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of local taxes is up only 8.8 percent.” Sternlieb’s Philadelphia study projected a cumulative local revenue shortfall of over $400 million through 1980. Even after they made “sacrifices,” Detroit budget officials pegged their fiscal 1976 deficit at $44 million, warning it would climb to $207 million by 1980. In recent years the mayors of Cleveland, Boston, St. Louis, Buffalo, Yonkers, Chicago—to name a few—have wrestled with budget deficits. Cleveland, says Sternlieb, “is going out of business.” Like New York, Cleveland and other aging cities have grown more and more dependent on federal aid to balance their budgets, more and more dependent on federal CETA (Comprehensive Employment Training Act) jobs, which now comprise 25 percent of the municipal payroll of many cities. London, Paris and Rome have huge deficits, but these are quickly closed by their national governments. Rome’s annual deficit, for instance, is about $1 billion, which the Italian government closes by guaranteeing bank loans.

The city of Tokyo is also teetering. Like New York, Japan’s capital lurched toward bankruptcy in early 1978. A $979 million deficit was projected. City officials pleaded with the federal government for help. The federal government responded by scolding the city for not getting its own house in order and crying wolf too often. Chastened, Tokyo’s Governor-Mayor, Ryokichi Minobe, a Socialist, slashed city limousines, increased school tuition, abolished some employee pay raises, reduced hiring and sold $221 million worth of city-owned land. “We understand how hard the Tokyo government is trying right now,” a spokesman for the Conservative national government told The New York Times, “but it is already two years too late. They should have adjusted their spending policies to their revenue realities a long time ago.”

Figuratively speaking, New York’s budget woes are not unique. Literally speaking, they are. No other major city matches the severity of New York’s fiscal crisis. Tokyo, for example, has 60 percent more people, yet its budget in 1978 ($10.9 billion) was almost 30 percent smaller. Tokyo employs 188,000 municipal workers—almost half New York’s total. And despite New York’s claim that it receives insufficient federal aid, about 22 percent of its budget is tendered by the federal government. Only 10 percent of Tokyo’s budget comes from the central government.

New York’s budget is unusual in another way. It not only assumes costs other local governments escape, but it also chooses to provide more variable services. Mayor Beame and Comptroller Goldin’s brief to the SEC, while striving to escape blame, demonstrates the consequences of these broad services: “The per capita cost of functions common to all nine cities represented only 18% of the total per capita cost of New York City government in 1972, while common functions consumed 46% of total per capita expenditures in the other nine cities.” Thus: after New York has “performed the ‘normal’ local functions … it has expended only 18% of the total it ultimately must spend. Conversely, when the nation’s nine other largest cities perform these common functions, they spend nearly half of all that they will be required to spend.”

In his 1976 survey, David Stanley found, “Two cities, New York and Yonkers, have been insolvent—unable to pay debts as they mature.” This contrasts with the surpluses enjoyed by many cities and forty-four states, whose tax base is more progressive and who thus capture more revenues with rising inflation. The aggregate state and local government surplus in 1977 was $14 billion. That year, tax collections by the six largest cities and counties surrounding Washington, D.C., expanded almost twice as fast as government spending. Senator Proxmire’s state of Wisconsin rolled up a $437 million surplus in fiscal 1978. Michigan, like New York State, has a surplus. Texas, with no income tax, expects a $3 billion surplus in 1978. California, with high taxes, in 1977 collected $2.9 billion more than it spent and in June 1978 had a cumulative surplus of $5 billion. Aside from