Things that most of us take for granted, like fixing a highway or repairing a bridge, are more and more becoming a kind of luxury these days.

Says the mayor of Newark, New Jersey, the high cost of maintaining basic services is slowly strangling urban America.

The Pennsylvania Department of Transportation's current fiscal crunch is one of the most visible signs of that in the Pittsburgh area.

Many highway projects are being delayed or canceled, and it's going to be a grim winter, as PennDOT estimates its labor costs have gone up by almost half a billion in ten years.

How did this mess come about?

Well, I think the Secretary's pointed out repeatedly, is the money that was borrowed to finance the federal highway program in the Commonwealth, over the last 8 or 10 years.

And the bond indebtedness, the interest keeps going up every year.

And I think we're up to 130 million a year coming out of our revenue.

And then, of course, coupled with that is the amount of money that's given to other agencies has been increased.

So we're talking about, PennDOT retaining less than 50% of what's taken in from revenue.

And what is the solution?

I don't know what the solution is.

All I know is we need more money and we need it very badly.

Our bond indebtedness keeps increasing.

And, of course there's inflation.

We all know there's inflation.

All other government branches, the housewife.

Everyone has that problem with inflation, increased costs.

Well, PennDOT has the same problem, but we have no additional revenue.

Compared with New York City and even with PennDOT, Pittsburgh City Hall is in an enviable position.

Pittsburgh held the rein on taxes and jobs and borrowing for the past five years, and managed to cut taxes several times.

However, Pittsburgh this year faces a crunch of its own, and the Flaherty administration is now proposing increases in the wage and water taxes and in parking fines.

Even so, the city's economy minded administration thinks that additional revenue will only hold the line against inflation, recession and spiraling costs.

Let me give you an example.

The city has reduced the amount of, for example, gasoline that it actually uses.

We embarked on a very stringent policy of rationing internally, the use of gasoline to try to control it.

But the cost of it is almost doubled.

And we do have a lot of police cars, a lot of fire trucks, a lot of public works vehicles.

Well that's doubled.

The city maintains a lot of lights.

That we light the streets.

We light the parks.

All of our lighting bills have almost doubled.

Our gas, for heating purposes, the city has a lot of small buildings in the parks, police stations, public buildings.

And that's gone up.

And in addition to all of that, about 60% of our costs are employee wages.

And when the cost of living go goes up, the employees demand higher wages.

And, that's a big part of it.

So that even though we have cut employment by 2,000 persons, our costs continue to increase.

And that's the basic reason for needing the 1% wage tax.

Another reason, and this is hard to understand if you don't actually work with the numbers.

When we cut back on employment in ‘71 and 72, we produce surpluses.

And so city, the mayor and city council cut taxes.

Last year, they cut them too much.

Council did at least.

The mayor didn't recommend as big a cut as they enacted.

So that this year we are using up over half of our surplus.

Well, once you use it, it's not available to be used again the next year.

And it really means that you were spending more than you took in that year.

One way to comprehend the financial bind on all levels of government is to understand this.

Just the debt service on PennDOT highway investment is now larger than the entire city of Pittsburgh budget.

Experts who study these matters, feel the point of diminishing returns may not be far off.

I think at the present moment, I think Pittsburgh, Allegheny County, Board of Education will be in a position to go into the bond market.

I think what happens here in the years, immediately ahead and, how they handle themselves, they're all going after tax increases.

I think, very frankly, tax increases per se are not bad.

But, I think all of them ought to make every effort to, explore their own, situations, determine, where in they can meet their, fiscal needs without tax increases, if they reach a situation where it's going to be necessary for them to increase taxes, to provide the services that they community demands and is willing to pay for, then the auto increase tax is the worst thing they can do is to provide expanded services without expanding their revenues through tax increases.

Across the country, the dark financial picture in New York has cast a grim shadow over most state and local governments.

They look at the recent experience of the Big Apple and they ask themselves, could it happen here?

Well, it could happen to any city.

I mean, in, New York.

What New York did any city could do and get themselves into a lot of trouble.

I think, voters and other people have to just be alert.

New York did two things.

I think, the first thing they did was they allowed their expenses to really skyrocket.

There is a limit to what local government can do.

And New York is discovering that now, to their dismay.

But in addition to, just spending a lot of money, they didn't raise taxes.

They felt in New York that they had high taxes and they couldn't raise them.

And so they borrowed money.

And that just won't work.

Local government cannot borrow money for current operations.

And New York, tried to do that.

And, finally, the banks and other people who buy their bonds just wouldn't buy them.

And so they not only, couldn't sell bonds for their own operating budget, which they shouldn't have been doing in the first place, but they can't sell bonds for any other purpose which which they should be permitted to do.

And, New York's an awful example, but I think most cities now will try to avoid that.