ABSTRACT
This chapter analyzes the actual expenditures for local services, such as those discussed, as well as changes in local revenue sources. It describes the failure of the expenditures to keep up with inflation to the severe burden that rising energy prices have placed on the operating budgets of local governments. However, for the purposes of examining the impact of rising energy prices on redistributive services, budget line items are not sufficiently precise, because they do not factor out "intergovernmental transfers". The starting point for analysis of local government expenditures must be a demonstration that rising energy prices are a sufficiently important factor to cause local governments to alter their spending patterns. For local governments coping with the pressure of rising energy prices, the possible response is to reduce total real spending for non-energy items. The chapter utilizes non-wage, non-capital expenditures as a proxy for energy costs to show that rising energy prices placed significant financial stress on local governments.
