The Nation - News from July 12, 1985

Municipal governments, especially small ones, are experiencing a modest economic recovery, but nearly half of all cities are running budget deficits, according to a report issued by the Joint Economic Committee of Congress. Federal aid to cities continues to shrink as a proportion of city budgets and is about half what it was in 1979, the report found, and cities are relying heavily on sales, property and income taxes for operating funds, and on industrial revenue bonds for economic development.