ABSTRACT
This chapter examines the policy responses to fiscal stress by small communities in one state. Dwindling budgets, public concern over waste, growing service demands, and increasing calls for efficiency and effectiveness in government operations have had significant impact on all levels of government in the 1980s. Small cities and rural governments have entered the intergovernmental arena at a time of increased concern for fiscal austerity. Despite the national government's continuing curtailment of grant funds, more than half of the communities claimed to have increased their search for new grants from other governments at all levels. Despite evidence of growing efforts to produce public-private partnerships in the larger North Carolina cities, this survey of smaller governments indicates that such partnerships have not come to North Carolina towns in large numbers. The Reagan administration's New Federalism has had major impacts on North Carolina's small communities, influencing their ability to undertake their responsibilities.
