WASHINGTON - Last year was a bad year financially for American cities and this year will be worse, according to a report released yesterday by the National League of Cities.

Budget shortfalls are plaguing a growing number of cities of all sizes, prompting city officials across the country to cut city services and raise taxes and other fees, according to the report. The report, entitled "City Fiscal Conditions in 1992," is based on a survey to which 620 cities responded.

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