Actually, the cost of shoring up old assets is just one of many challenges that have converged to create a perfect storm of financial stress for the public sector.

Today, Chicago Mayor Richard Daley announced that city employees will get the day after Thanksgiving, Christmas Eve, and New Year's Eve off without pay to help offset a $470 million budget shortfall. Claiming the furlough will save 225 jobs; the mayor assured Chicagoans that workers will be called back in 'if there's a big snowstorm or other emergency.'

I'm surprised Daley didn't take the step sooner. I've been seeing more and more examples of how states, counties, and cities are trying to hold down spending. Dallas scaled back pavement preventive maintenance goals; contracts for Missouri's program to remediate 800 bridges are being rewritten to exclude maintenance, which will be performed by the state transportation department.

During the downturn of 2001, property tax revenues offset declining sales and income tax receipts. But seven years later, having borrowed ourselves into oblivion, the National League of Cities (NLC) reports that the housing market will affect budgets until 2010. Almost 60% of the respondents to NLC's 'City Fiscal Conditions' survey say the health of the local economy is negatively impacting finances, and will do so until at least 2010 (Click here to read more).

Energy prices and inflation are hitting budgets hardest, followed by increases in infrastructure and public safety spending; and employee-related costs for wages, health care, and pensions.

To meet budget shortfalls, half of respondents have increased the rate or number of fees, such as impact and development fees.

NLC didn't ask if layoffs, either temporary or permanent, are being used to hold costs down. Or if it did, the association declined to report them.

Do you think furloughs are a reasonable way for elected officials to balance the budget? Click here to share your opinion.