Oct 14, 2011



Alan EhrenhaltAlan Ehrenhalt, Editor, Stateline

October 14, 2011 — In a recent series titled “The Local Crunch,” Stateline, the daily news service of the Pew Center on the States, explored growing friction between state, city and county governments over revenue and responsibilities.

Stateline Editor Alan Ehrenhalt discusses the series’ findings about the historic and current relationship between state and local governments’ views and the possible effects on local communities.   

What prompted Stateline’s interest in a series about the relationship between states and localities? Are we witnessing a fundamental shift in that relationship?

The changing relationship between the federal government and the states has gotten quite a bit of attention this year, but relations between states and localities have been largely ignored. As the series shows, the state-local connection is equally important—if anything, closer than the state-federal connection.

"Most cities and counties are facing a budget squeeze similar to the one at the state level, but they have nobody further down to pass the problem off to."

What is the historical relationship between states and localities? In the hierarchy of government, where does local control stand?

Cities and counties are created by acts of the state in which they are located. In many states the local governments have been granted some form of home rule, but in others, such as Indiana and New York, the localities can’t make some fundamental policy decisions – raise the property tax, for example – without state approval. That can lead to a close, though not necessarily warm, relationship. You might say that a fair number of localities are yoked to state authority.

According to your series, some view the issue as states passing fiscal pain to cities and counties; others say states are simply pushing localities to be more efficient. Who is right? What are the conflicting views here?

Some governors, such as Mitch Daniels of Indiana and Andrew Cuomo of New York, believe that local government is inefficient, with whole layers of management that are essentially duplicative. But in some states, the governor and legislature simply found themselves in a budgetary hole and solved part of it by devolving responsibility downward or cutting out aid to localities that they have traditionally given.

What is fundamentally at stake here? Where is this heading?

Most cities and counties are facing a budget squeeze similar to the one at the state level, but they have nobody further down to pass the problem off to. They are the end of the line. One thing this will mean, pretty much all over the country, is substantial cutbacks in vital local services. The one glimmer of good news is that, in some places, necessity may generate a round of creative solutions that will help local governments operate in a more efficient way.

Critics say that local communities are the anchor and center of state economies and warn against policies that threaten localities fiscal health. What is the danger here?

Cities are where jobs are created and revenue is produced. It’s important for states to realize the profound effects their policy choices can have on cities, counties and their residents.

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