As I said yesterday, the decline of central cities was fed by the budget implications of wealthy-household departures. Tax base erosion led to declining services and tax increases to try and make up the losses, both of which pushed still more families out of the city.

That’s what we continue to see in the suburbs. Prince William County has already cut spending by $19 million, and it now wants to increase property tax rates by 28 percent. Of course, I would have a lot more sympathy for Prince William if a huge chunk of the budget gap didn’t result from strict crackdowns on immigration. A 28 percent tax rate increase is basically the price of stupidity.

In Fairfax County folks are outraged, because the county is considering using special transportation funds to cover its budget shortfall. Rightly so. Those transportation needs aren’t going away, so opting to spend transit money is just a tax increase deferral, not an avoidance of one. Plus, it’s kind of dishonest.

But look, these problems are facing every local government to some extent. It turns out the District is actually in the red, Arlington is looking to increase taxes and cut services, Montgomery County is warning that the budget process is going to be painful, and so on. This is why a lot of economists argued that the federal stimulus package should include money for state and local governments. States and counties are generally unable to borrow much in crisis periods, either because they are prevented by law from running deficits, or because they need to jealously guard their credit ratings. This forces those places to either cut spending or increase taxes, both of which are contractionary.

But the federal government can and should borrow. Given the overall economic climate, it’s incredibly damaging for these places to be cutting needed services for strapped families and unemployed workers. It’s also depressing to see infrastructure and construction projects–community investments which could also support local economies–scrapped due to borrowing constraints. It’s really dumb for the federal government to be totally ignoring these needs. And we can blame that failure on the GOP.