Municipal finance has undergone a substantial transformation from the relatively prosperous decade of the 1990's to significant cutbacks during the mid-2000's. In many instances municipalities had increased services and rebuilt decaying infrastructure facilities when funds were available. The municipalities differed substantially, however, depending on location-- suburbs or downtown. In a continuing effort to understand trends in municipal finance and corresponding management practices, the Illinois Institute for Rural Affairs, Western Illinois University, and the Illinois Municipal League surveyed mayors in 2002 about management practices and issues faced. The resulting report addresses several main issues. Changes in revenues raised and spending practices are summarized to identify shifts in priorities and reliance on revenue sources. Major issues faced by Illinois municipalities are addressed along with policy responses.