A new report by the National League of Cities argues that states that have given their municipalities broader local taxing authority and refrained from enacting tax and expenditure limitations, such as Alabama and Missouri, have better equipped those localities to weather the current economic downturn.

Chris Hoene, director of policy and research for the NLC and co-author of the 25-page report released last week, said that for local governments to maintain bond ratings, invest in infrastructure, and be financially solvent, states need to provide sufficient fiscal autonomy for localities to fund their share of residents' needs because those localities are better suited to determine how to use tax revenues.

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