[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-323789-105":59,"doc-detail-323789-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","state-and-local-red-ink-crisis-or-opportunity","State and Local Red Ink - Crisis or Opportunity?","","State and local governments face intensified fiscal stress as federal aid expanded in the 1960s and 1970s, then reversed in the 1980s amid budget pressure and policy change. Without reliable federal safety nets, many states reported growing “red ink,” relied on rainy day funds, and risked budget shortfalls under legal balancing requirements. The review examines whether Reagan-era federal cutbacks reduced economic efficiency and social equity or produced the opposite effects, weighing mixed program performance and competing efficiency arguments.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/state-and-local-red-ink-crisis-or-opportunity/323789/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/state-and-local-red-ink-crisis-or-opportunity/323789.png","ImageObject",300,407,{"name":92,"@type":93},"Jiven","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":44},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"Why did federal aid to state and local governments change after the 1970s?","Question",{"text":112,"@type":113},"Federal aid growth that expanded services in the 1960s and 1970s reversed in the 1980s due to federal budget stress and a shift in political philosophy after the election of President Reagan.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What does the document say about how state and local budget deficits are handled?",{"text":117,"@type":113},"Most state and local governments are required by law to balance budgets, so deficits can be more alarming than similar federal shortfalls and can lead them toward bankruptcy-like outcomes if persistent.",{"name":119,"@type":110,"acceptedAnswer":120},"What are the main arguments about the effects of reduced federal aid?",{"text":121,"@type":113},"One view claims reduced federal dollars can lower efficiency and equity, while another argues cutbacks force more accurate cost-benefit decisions and make the public sector more efficient without sacrificing equity.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},323789,1790672196,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":44,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},1099513958607,"https://ap-avatar.wpscdn.com/avatar/100002390cf8733938c?x-image-process=image/resize,m_fixed,w_180,h_180&k=1778829742770036399","# State and Local Red Ink:Crisis or Opportunity?\n\nby Brian A.Cromwell and Irene A.Wirkus  \nturing in the roles of state and localgovemments within our federal system.Whereas the 1960s and 1970s witnesseda dramatic increase in federal aid and acorresponding expansion of federalscope and responsibilty for providinglocal public services,this trend reversedduring the 1980s in response to federalbudgetary stress and to the change inpolitical philosophy that resulted in theelection of President Reagan.State andlocal govemments,which had expandedtheir own spending in response to theavailability of federal aid,were forced toeither scale back services or raise theirown revenues to provide for them.  \nThis restructuring has not been accom-plished without political and fiscalstress.With no federal safety net,stateand local govemments are more vul-nerable to economic fluctuations.Despite the sustained national eco-nomic expansion of the past decade,agrowing number of state governmentshave reported red ink as a result ofregional slowdowns.Dependent ontheir own resources,state and localgovernments have had to rely on \"rainyday\"funds to respond to unexpectedregional developments.Those that in-adequately prepared for economicsurprises are now suffering the conse-quences—witness Massachusetts.  \nThis Economic Commentary reviewsthe current fiscal stress in the state and  \nlocal sector,links this stress to thechanging role of the federal govern-ment,and discusses the costs andbenefits of restructuring.There arestrong arguments for the idea that thefederal govemment can,through sup-port of the state and local sector,en-hance economic efficiency and providefor greater equity in our society.Therecord of federal programs in achievingthese goals.however,is mixed.Often,federal funding is unrelated to realstate-and local-level needs.  \nOn the other hand,some analystsbelieve that reduced federal dollars instate and local government coffers willresult in a more efficient public sectorwith no sacrifice in equity.They arguethat federal aid can distort the cost ofgovemment expenditures as perceivedby state and local governments,leadingto higher levels of spending.Cutbacksforce state and local decisionmakers toweigh the costs and benefits of publicexpenditures more accurately and,through that process,to better reflectthe preferences of their constituents.  \n■ Overview of Fiscal Health  \nThe aggregate surplus of state andlocal governments,a commonly citedindicator of fiscal well-being reportedin the National Income and ProductAccounts(NIPA),provides little causefor concen about the fiscal health ofthose govemments (table 1).The stateand local sector has consistently shown  \nJuly 15.1990  \nHave the Reagan-era cutbacks infederal aid to state and local govern-ments resulted in decreased economicefficiency and social equity,or havethey had just the opposite effect,assome economic analysts would argue?  \na surplus throughout the 1980s.rang-ing from $26.8 billion in 1980 to apeak of $65.1 billion in 1985,andstanding at $44.3 billion in 1989.  \nThe NIPA accounts,however,mask twoimportant considerations:(1)the inclu-sion in the surplus of net contributionsto social insurance funds,which do notfinance current operating expenses,and  \n(2)the considerable variation in fiscalconditions across states and localities.  \nExcluding net contributions to socialinsurance funds from the aggregatefigures substantially alters the picture.The most recent NIPA estimates showan operating shortfall of S33 billion in1989,which marks the third consecu-tive year of mounting red ink.  \nIn many respects,a state or localgovenment deficit is more alarmingthan a federal one of equal proportion.because most state and local govem-ments are required by law to balancetheir budgets.Consequently.they mustoperate more like a business or  \nhousehold.typically setting aside arainy day fund and trying to maintain abudget surplus of at least 5 percent ofexpenditures.If a deficit persists,thestate or loca","cbCaieCF2VCPKhN3","https://ap.wps.com/l/cbCaieCF2VCPKhN3","pdf",1073480,"English","# Overview of Fiscal Health\n## The Changing Federal Role","[{\"question\":\"Why did federal aid to state and local governments change after the 1970s?\",\"answer\":\"Federal aid growth that expanded services in the 1960s and 1970s reversed in the 1980s due to federal budget stress and a shift in political philosophy after the election of President Reagan.\"},{\"question\":\"What does the document say about how state and local budget deficits are handled?\",\"answer\":\"Most state and local governments are required by law to balance budgets, so deficits can be more alarming than similar federal shortfalls and can lead them toward bankruptcy-like outcomes if persistent.\"},{\"question\":\"What are the main arguments about the effects of reduced federal aid?\",\"answer\":\"One view claims reduced federal dollars can lower efficiency and equity, while another argues cutbacks force more accurate cost-benefit decisions and make the public sector more efficient without sacrificing equity.\"}]","State and Local Red Ink - Crisis or Opportunity? | PDF",1789966195,13]