Local government and criminal justice system operations were analyzed in terms of changes in expenditure patterns and resource allocations, shifts in local program control to the State level and changes in interagency cooperation, and changes in the initiation of major cost cutting improvements. The major trends identified were applicable to local government as a whole as well to as the criminal justice system. The local governments applied short term solutions to the problem of reduced long-term funding by reducing outlays for new equipment, reducing maintenance work, avoiding innovative management with high front end costs, and reducing expenditures for planning and research. State involvement in local government increased slightly during the first year after Proposition 13; however, many local officials were concerned about possible increased State involvement in the future. The passage of Proposition 13 is expected to influence Federal-local relations and the types of grants which localities seek. Applications for LEAA remained about the same as before; however, many officials felt that fewer programs would be continued beyond the end of Federal funding. Proposition 13 has also increased competition for revenue-sharing funds. State funding made services integration more difficult and cooperative efforts among local criminal justice systems declined. The impact of Proposition 13 may be a less humane and less responsive criminal justice system. Footnotes are inlcuded.