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and PAGET <br />3,,.'.s,,~' 3-' T~,, !~5 :~: ;,: D~'~T~ <br /> <br /> Managemen~ <br /> Oonsulcancs <br /> <br /> Bill G. Evans <br /> Vice President, <br /> Public Sector Services <br /> <br /> 2101 L Street, N.W. <br />Washington. D.C. 20037 <br /> (202) 463-2800 <br /> <br />REDUCE EXPENSES WITHOUT <br />REDUCING SERVICES <br /> <br />How Cities And Counties Can Avoid <br />Increasing Taxes Even Though <br />Federal And State Aid Are Reduced <br /> <br /> A number of reasons force city and county govern- <br />ments to reduce expenditures, even though they still <br />must govern and provide services. The governing part <br />of their mission is important, but not very costly. Pro- <br />viding services, especially the "Big 3" - police, fire, and <br />public works - consumes the lion's share of the operat- <br />ing budget. <br /> <br /> Local government services are for the most part <br />very labor-intensive; that is, the predominant cost is for <br />employees' salaries and fringe benefits. These costs <br />have been going up with inflation and employees' ris- <br />ing expectations, but they have not been offset by ad- <br />vances in technology, ~ ~iave some labor costs in the <br />manufacturing segment of our economy. <br /> <br /> Unless the value of assessed prope,,'ty increases <br />proportionately to rising salaries and unless more rew <br />enue comes from sales tax and state and federal aid, <br />local governments obviously must increase tax rates <br />or reduce expenses. If federal and state aid are re- <br />duced, local taxes must go up or local expenses must <br />go down. How can reductions in expenses be made <br />without raising taxes or diminishing services? <br /> <br /> <br />