States Feel Strain as Budgets Fall Short

Hard-Hit Cities Make Difficult Choices

While Obama tried to reassure states that he will invest in infrastructure, the president-elect acknowledged that the economic recession is forcing states and cities to prioritize.

"These are difficult times and we're going to have to make hard choices in the months ahead about how to invest precious tax dollars and how to save them -- hard choices like the ones you're making right now," he said.

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Choices like the ones in the small city of Duluth, Minn., where television cameras captured one woman who was turned away at City Hall -- the doors unexpectedly locked. Officials decided to shut down City Hall for four days this year, in hopes that the saved money will help keep 20 full-time city workers employed.

A similar scene is playing out in Phoenix, where the mayor has asked employees to work one day a month for free and to give up their pay raises next year.

In Nashville, Tenn., lawmakers face the excruciating task of cutting $20 million from the state's education budget, which means less funding for much-needed after school programs, tutoring and remedial programs.

Even zoos aren't immune. In New York State, lawmakers are considering cutting budgets by more than half. Animals must be fed, so workers say that programs for the public will be cut.

In Spokane, Wash., the animal shelter is now closed two days a week simply because they can't afford to staff it.

As cities, towns and school districts across the country are forced to make drastic cuts, lawmakers say that the real problem is that it's just the beginning.