Strapped for Cash, Local Governments Sputter

Feb. 24, 2010— -- As fallout from the housing market collapse and financial crisis continues to spread across the country, America's city and county governments struggle to make ends meet.

Increasingly, some local governments simply cannot.

A quick and ugly snapshot:

Borrowing more money, which is how Harrisburg and other municipalities fell into the red in the first place, is often no longer an option. State-level funding is drying up. Property taxes, among the largest sources of revenue for local governments, are heading down along with property values as lagging assessment cycles catch up with realities in the market.

While there hasn't been an actual spike in municipal bankruptcies in recent months relative to historical norms, the outlook is bleak.