If you are a municipality in Pennsylvania, you do not have an easy life. In many ways, you operate like a small business: You have revenues, expenses, assets, liabilities and cash flow. But you also operate under a set of rules pursuant to state statutes. These rules are made by your "creator" — the commonwealth of Pennsylvania. Your creator operates in a political environment in which many of the entities with whom you deal have more influence with the creator than you do. The rules under which you operate are often slanted against you.
When it comes to revenues, you rely primarily on real estate taxes and earned income taxes. In more mature communities, like cities and boroughs, the ability to raise taxes is limited. Combined with significant poverty populations and declining industry, these mature communities can experience revenue shortfalls even in flush years.
