Beginning in the late 1970s and accelerating during the 1980s, U.S. cities lost substantial federal assistance. This research identifies those cities that were especially dependent on federal transfer payments both before and after most of the cuts had been made. The authors also analyze changes in municipal fiscal behavior between 1975 and 1987. In 1975, the most aid-dependent places were central cities suffering both socioeconomic and fiscal stress. Only central city status and socioeconomic hardship were primary predictors of aid dependency 12 years later. The second stage of the analysis shows, unexpectedly, that the loss of federal funds was not a significant influence on the fiscal decisions made in this large group of cities.
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