"After years of whittling staff and cutting back on services, towns and cities are now outsourcing some of the most basic functions of local government, from policing to trash collection. Services that cities can no longer afford to provide are being contracted to private vendors, counties or even neighboring towns.
The move saves cities budget-crushing costs of employee benefits like health insurance and retirement. Critics say contracting means giving up local control and personalized services."
And the problems for city budgets aren't going away anytime soon. A report from the National League of Cities predicts that municipalities will face deficits of $56 to $86 billion between 2010 and 2012.