During the past six years, state-local government finance ranged from a situation of fiscal crisis in 1970, to a boom in 1972-73, and back to a crisis in 1974-75. This was far worse than any since the Great Depression. During the recession of 1970-71, rising state and local tax revenues and federal grants did not keep pace with increases in expenditures resulting primarily from inflation [21, p. 500]. More favorable conditions in 1972-73, though, saw researchers projecting large future surpluses for the remainder of the decade and calling for reductions in tax rates and increases in expenditures [11, pp. 364-366].
The Reform of Intergovernmental Fiscal Relations to Cope with the Fiscal Crisis of Local Government in Korea
