Tiny Towns May Be an Endangered Species

There are no road signs in this area of western Pennsylvania betraying the presence of Green Hills, a square-mile borough with a population of 29. Green Hills was incorporated in 1978 for the sole purpose of securing a state liquor license for the Lone Pine Country Club—because the golf club was located in a "dry" township. Mayor Terry D. George draws no salary and presides over an annual budget of about $10,000. When asked what compelled him to seek office, the 63-year-old golf pro answers: "Someone has to do it."

Politicians in several states say the existence of hamlets such as Green Hills can no longer be justified with budget shortfalls nationwide that could total $112 billion in the coming fiscal year. Pennsylvania, Ohio, New Jersey, and Michigan, among others, are pushing school districts and local governments to share more services and to consolidate for the sake of efficiency and cost. "People are saying, 'Come on, we know why you would want to keep it this way, but we just can't continue to afford it,'" says Scott D. Pattison, executive director of the National Association of State Budget Officers in Washington.