1 - Migration/Tax Base Erosion Fiscal Stress is caused by tax base erosion which occurs while the city increases its outlays to service the poor As the tax base declines and service levels either remain constant or increase, tax rates will increase As tax rates increase, the tax burden increases, forcing business and higher income residents to leave the city, further reducing the tax base

Corollaries to Model 1 Migration of poor blacks and hispanics to the central cities brought about an expansion of services aimed at the poor which resulted in higher per capita expenditures Businesses leave the central city for a variety of reasons; including high taxes, expensive labor, land, power or transportation, and changing technical requirements.

2 - Bureaucratic Expansionism Government performs the wrong functions ; separable rather than collective goods, the beneficiaries of which increase demands for publicly provided services Taxpayers are reluctant to pay more: They see others benefit rather then themselves or the public They believe bureaucrats aggrandize themselves

2 - Bureaucratic Expansionism Bureaucrats act as follows They measure their own prestige by the size of their bureaus and number of employees They can improve their salaries in a large bureau as opposed to a small one Bureaucrats have sufficient power to bring about the expansion they desire

2 - Bureaucratic Expansionism City Governments will increase there demands for federal aid because it seems cheap to them. Federal funds will increase local expenditures, cause an increase in the scope of local government, and distort local priorities

3 - Political Vulnerability - Cyclical A change in population concentration, location, or voting preference breaks up stable voting coalitions. Such a period is characterized by small factions, many candidates, and small followings Money is spent to cement new voter coalitions - patronage jobs, siting of projects in certain areas, awarding of contracts to select businesses, city services based on loyalty, salary increases to city employees

3 - P. V. - Non-Cyclical A change in government structure results in weaknesses in the form of government or in the processes of administration which make city hall vulnerable to demands An increase in the effective demands of interest groups results in greater governmental vulnerability to demands