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The Challenge of Effectiveness:
Local Government in the United States
M I C H A E L A . PAGANO
Iowa state judge John Dillon shaped the constitutional and legal life of
local governments in the United States in an 1868 ruling that asserted that
municipal governments are the sole creation of state legislatures.
“Municipal corporations owe their origin to, and derive their powers and
rights wholly from, the legislature,” wrote Judge Dillon. “It breathes into
them the breath of life, without which they cannot exist. As it creates, so it
may destroy.”
States have, however, designed greater or lesser spheres of autonomy
within which their local governments may operate. Whether the state
grants broad expanses of authority under liberal “home rule” status or
severely restricts scope and authority, states can ultimately control their
local governments.
Until the Great Depression of the 1930s, the relationship between
federal and local governments was not very direct or sustained. The
New Deal, a series of federal actions implemented during the Great
Depression, changed this relationship significantly by expanding federal
aid to local governments, especially in areas traditionally thought to be
of local concern such as public works and then later in housing, health
and welfare, and education. The federal government can impose rules and
United States 43
regulations either statutorily or as a condition of a grant-in-aid, and regulate
the behaviour of local governments through powers of partial preemption
and direct orders.
As creatures of their states, local governments are assigned functional
responsibilities, enabled to create governing institutions with rule-making
powers, and granted revenue-raising authority. These assignments are not
uniform across all 50 states, however. Some states assign the education
function to counties and cities in “dependent” education systems while a
majority has created single-purpose “independent” school districts. Only
Hawaii directly administers public education. County governments are
general-purpose local governments, created as administrative arms of the
states, but function fairly autonomously with elected officials or commissioners
who adopt budgets, raise revenues, and pass local ordinances.
Municipal corporations (cities, towns, boroughs or villages) are also generalpurpose
governments. Their elected bodies, called councils, have budgeting,
revenue-raising and law-making powers. The precise assignment of functions
to municipal and county governments varies by state. For example,
while most cities experience an overlay of county government, in Virginia
cities exist independently of counties.
Generally, municipal corporations are charged with protecting life and
property, typically through public safety provisions including fire protection,
police, and emergency medical services, zoning and land-use powers, and
local public works including streets, water and sewer systems. Counties’
functions include those of the municipalities as well as welfare, prisons,
roads and, in some states, education. Townships, which are subdivisions of
counties, form local governments in only 20 states and have only limited
responsibilities in most states, typically for roadways and police services. In
Pennsylvania and New Jersey, townships can assume general government
powers, much like municipalities.
Since 1946, the number of local governments has grown dramatically
to 87,849 in 2002. Yet these numbers mask a wide variation in the composition
of local governments. School district consolidations over the past
50 years, for example, reduced their numbers from well over 100,000 post-
World War II, to only 13,522 in 2002. Special districts experienced a contradictory
trend, surging to 35,356 in 2002 – an increase of 187 percent
since 1952.
Variances in other local governments are also remarkable. Compare
today’s 19,431 municipal governments with the 16,087 enumerated in 1952.
Counties have consolidated, losing only 18 since 1952 for a current total
of 3,034, while the number of townships has declined somewhat to 16,506
from 17,202 in 1952.
Although nearly all local governments have the legal authority to collect
a property tax, their reliance on this form of taxation has waned during
the last several decades. Gradual adoption of other forms of general
44 Michael A. Pagano
taxing authority, especially local-option taxes on retail sales and on
income, has diversified revenue structures for counties and municipalities.
School districts and townships remain highly property-tax dependent.
Local governments are also permitted to charge a fee for certain services.
Such fees, or user charges, have become the fastest growing and most
important type of own-source revenue for counties and municipalities.
In the nineteenth century, the Industrial Revolution moved people and
manufacturing enterprises into close proximity. This gave rise to larger
and larger towns and cities and provided the impetus for governmentprovided
services such as potable water, efficient transportation systems
and common schooling. As local governments and regions expanded, there
was a heightened awareness of the need to either cooperate or compete
with neighboring local governments.
In this way, local governments learned to combine or merge activities
when circumstances warranted, such as capturing economies of scale. This
practice is illustrated by the merging of five boroughs in the metropolitan
area of what is now New York City, the combination of certain services in
the Indianapolis region under Unigov, and the
consolidated services and governing structures
of Nashville-Dade County.
Local governments may also adapt by remaining
separate governments, while cooperating
with other local governments within their region.
Services may be provided through voluntary contractual
arrangements called interlocal agreements.
Local governments can also create public
authorities, with state approval, for infrastructure
revenue-raising purposes, such as debt issuance.
They may also incorporate themselves under
enabling legislation at the state level to form new
local governments, such as special districts, to
provide specific services. And local governments
operate within an increasingly prevalent, albeit
uneasy, arrangement with gated communities, residential areas enclosed
by walls and fences, which provide many services that duplicate municipal
or county services such as street cleaning, safety, refuse removal and parks.
The layers of horizontal and vertical governments – as well as the layers
of non-profit organizations that contract with state and local governments
for the purpose of providing “government” services, not to mention the
growing importance of community residential associations that provide
services and organize themselves as “private governments” – these tens of
thousands of legal organizations fragmenting and splintering across the
landscape present challenges to the stability and effectiveness of local and
regional governments in the federal polity.
Local governments
operate within an
increasingly prevalent,
albeit uneasy,
arrangement with
gated communities
which provide many
services that duplicate
municipal or
county services such
as street cleaning,
safety, refuse
removal and parks.