New York City, Buffalo, Rochester, Syracuse, and Yonkers share many qualities of cities in the Northeast including blighted neighborhoods, deserted factories, heavy municipal debt, shrinking constitutional taxing and borrowing limits, reductions in services, an aging housing market, substantial unemployment, and financially dependent school districts. The economies of these once prosperous urban areas are undergoing transition. When the costs to the nation of urban economic decline are calculated, the importance of urban recovery should receive heightened Federal and State attention and action. The cities' responses to severe financial conditions, by reducing expenditures and by developing revenue sources, have been short-run attempts which have met the immediate emergency of maintaining and restoring fiscal integrity. Federal revenue sharing has become a stop-gap program in the face of recession and inflation. A fundamental economic turnaround is needed to restore the cities' viability. Such action should come in the form of a large infusion of permanent intergovernmental aid. (RLV)