Forgot to ask this as well.

[El Diablo]

Welcome Theedave.
The negative income shown on the towns with high squalor is misleading and is detailed in many other threads in the org.

But as a quick clearup for you....
1. NO town EVER makes a negative income (i.e. owning a town will never cost you money). A town makes money end of story.

2. However you spend money every turn on troop and generals upkeep as well as "losing" money to corruption and whatnot.

3. So the number that you are given as the "towns income" is how much it is making (with all minuses added) comparative to its size (population). Thus a high population city with few money making buildings (markets, ports, etc) will make little money. The settlement is also attributed the cost for a percentage of ALL the factions troops - regardless of the troops location. This percentage of troop cost is the same as the percentage of the factions population in that settlement.

Thus a large city in a small faction will have to pay a higher percentage of the troop maintenace costs. If this cost exceeds the money "made by the city it will show as a negative income.
If you lose the large city you will lose its income (however minor) and your situation will worsen

I hope that this helps...

Ohh and......
As a counter to squalor it is good to build public health bui;ldings like sewers etc. (as has been stated above) but it is important to note that some of these require markets, forums etc to be built before you can build them (that would be why they may not been in the allowable build queue.