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A brief overview of a study in which expenditures in the City of Los Angeles were examined for the period from fiscal year 1973 through fiscal year 1978. The objective of the analysis was to clarify the implications of the fiscal limitation movement by identifying the components of expenditure growth that will have to be controlled in the future. Among the findings were: (1) very little of the growth of expenditures is explained by increased programs and activities (in fact, city-funded direct services to the public appear to have been declining); (2) over 75 percent of the increase in expenditures was due to inflation; and (3) almost half of the remaining increase is attributable to a shift in the mix of employees (a decrease in the number of lower-paid employees who provide direct services to the public, and an increase in the number of middle- or higher-paid administrative and support personnel).

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