Metropolitan Limits: Intrametropoliton Disparities and Governance in U.S. Laboratories of Democracy

Michael A. Pagano

Miami University, Oxford, Ohio

Background

Defended by its architects as the best defense against tyranny and as the institutional protector of liberties (Hamilton et al., 1961), the federal system of governance in the United States also promises diversity in local government structures and services, revenue access and limits, tax rates and burdens, and outputs and outcomes. By characterizing the role of states in the U.S. federal system as ''laboratories of democracy,'' Justice Louis Brandeis implied that state and local governments, unfettered by central-government rules and regulations, would experiment with a host of public policies—some failing and some achieving desired results. This characterization also implies spatial variations in tax policies, burdens, and services not only across states but also within and between metropolitan areas. The resulting variation in many metropolitan areas has been fragmentation in service delivery and revenue collection and disparities in tax burdens and service quality.

Studies on municipalities in the post-depression era focused on suburban-city (or central city/outside central city) disparities and attendant problems in metropolitan governance (Jones, 1942). White flight and middle-class exodus from the central cities often translated into poorer services in the central cities, higher tax burdens, and inequities resulting from central-city residents covering suburban residents' service costs during the work day. While suburban residents matched their collective preferences (especially for education, safety, and transportation) with an acceptable tax level, central-city residents shouldered the service delivery costs of suburban commuters to the central city (especially police,



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Metropolitan Limits: Intrametropoliton Disparities and Governance in U.S. Laboratories of Democracy Michael A. Pagano Miami University, Oxford, Ohio Background Defended by its architects as the best defense against tyranny and as the institutional protector of liberties (Hamilton et al., 1961), the federal system of governance in the United States also promises diversity in local government structures and services, revenue access and limits, tax rates and burdens, and outputs and outcomes. By characterizing the role of states in the U.S. federal system as ''laboratories of democracy,'' Justice Louis Brandeis implied that state and local governments, unfettered by central-government rules and regulations, would experiment with a host of public policies—some failing and some achieving desired results. This characterization also implies spatial variations in tax policies, burdens, and services not only across states but also within and between metropolitan areas. The resulting variation in many metropolitan areas has been fragmentation in service delivery and revenue collection and disparities in tax burdens and service quality. Studies on municipalities in the post-depression era focused on suburban-city (or central city/outside central city) disparities and attendant problems in metropolitan governance (Jones, 1942). White flight and middle-class exodus from the central cities often translated into poorer services in the central cities, higher tax burdens, and inequities resulting from central-city residents covering suburban residents' service costs during the work day. While suburban residents matched their collective preferences (especially for education, safety, and transportation) with an acceptable tax level, central-city residents shouldered the service delivery costs of suburban commuters to the central city (especially police,

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fire, and transportation services) in addition to the costs of their own collective preferences. More recent studies show that, as the poor are increasingly concentrated in central cities relative to their surrounding suburbs, more own-source revenues are being spent for poverty and social programs by these cities than by smaller suburban cities.1 In the past decade, studies have resurrected earlier calls of metropolitan governance as a mechanism for reducing intrametropolitan disparities and have raised questions about the health and vitality of the entire metropolitan region (Wallis, 1994; see also Ledebur and Barnes, 1993; Barnes and Ledebur, 1994; Savitch et al., 1993).2 One of the more visible advocates of metropolitan government former Albuquerque mayor David Rusk, contends that "elastic" cities (or cities that are likely to capture surrounding growth that otherwise might have become incorporated suburbs) are more likely to survive economically and politically than are "inelastic" cities (Rusk, 1993). Others argue that the economic and political survival of central cities has a profound effect on the economic and political survival of surrounding communities in the metropolitan region (see, in addition to the references above, Orfield, 1997; Pierce with Johnson and Hall, 1993; Schaefer and Schaefer, 1996; Barnes and Ledebur, 1997). Recent commentaries on metropolitan regions, central-city poverty surrounded by wealthy suburbs, and efficient service delivery arrangements in extramunicipality regions have created a resurgence of interest in metropolitan governance and regional affairs. The purpose of this paper is to review policies and strategies that have been experimented with and whose goals include mitigating intrametropolitan disparities and enhancing metropolitan governance more generally. Revenue and Expenditure Variations Before undertaking a review of those strategies, it is important to sketch briefly the diversity of local governments in the U.S. federal system. Local governments vary both in the composition of their revenue structures and in their service delivery responsibilities. Local governments in a federal system also decide on the appropriate balance between meeting the collective and individual preferences of their citizens. In some local governments, policies are decided that garner a greater share of the community's wealth to meet a comparatively higher level of collective or public needs, and in others the decision is to collect a smaller share of the community's wealth to meet more individual or private needs and demands. The tax burden in the former areas, then, is usually greater than in the latter area, other things being equal (e.g., productivity of public services).3 As a consequence of this diversity both in access to fiscal powers and in collective needs (both of which create idiosyncratic local government fiscal policies), attempts to compare differential tax burden and services across more than 19,000 U.S. cities and more than 83,000 local governments are, if not impos-

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sible, certainly difficult. For example, a property tax rate of 10 mills in one city may generate more revenue than 10 mills in a neighboring city if the assessed value of property in the first city is its fair market value and in the second city only a fraction of fair market value, if the demand for land is greater in the first city than in the second, if the second city is a retirement center that has a circuit breaker for senior citizens, if the first city also includes personal property in the property tax base, and so on. Moreover, local governments have increasingly turned to user charges and fees to fund their services. Between 1966-1967 and 1991-1992, local government fees and charges have increased from 23.6 percent of general own-source revenues to 36.4 percent (Table 1). At the same time, the composition of general tax revenue has also shifted substantially from little reliance on the sales tax (6.7 percent of general tax revenues) to substantially more (18.2 percent). But it is the user charge that is particularly noteworthy. It has hardly dented school district revenues (Table 2), hovering around 17 percent of own-source revenues for the past quarter-century. Beginning in the late 1970s and early 1980s, user fees and charges have surged in importance for counties from 25-30 to 40 percent of ownsource revenues (Table 3), and for cities from 30 to almost 40 percent (Table 4). Whereas virtually all city governments and most local governments are granted access to a property tax,4 some states allow their general-purpose municipal governments access to an income tax or a sales tax. Table 5 lists local option taxing authority. According to the latest available data (1994), 4,111 local governments are authorized to levy an income tax, or nearly 25 percent more than in 1976. Yet if one excludes the 2,830 local governments in Pennsylvania, the 615 cities and school districts in Ohio, the 379 school districts in Iowa, and the 140 local governments in Kentucky that are permitted access to a local-option income or wage tax, the remaining 7 states allow only 157 of their local governments the authority to levy an income tax. Few local governments outside those four states, then, have their states' authorization to tax income or earnings. Yet 31 states allowed 6,579 local governments throughout the country access to a sales tax in 1994, up more than one-third from 1976 levels. Whereas local-option income taxes are fairly concentrated, the local-option sales tax is much more pervasive. Furthermore, some cities and other local governments may not be permitted to increase tax rates or expenditure levels or tax levies because of state- or locally imposed tax and expenditure limitations, such as California's Proposition 13 (approved in 1978) and Proposition 218 (approved in 1996). Thus, given the enormous diversity in potential revenue structures by type of local government, by state, by local ordinances, and by citizen preferences, an unambiguous measure of revenue or tax equity within and between metropolitan areas is clearly difficult to create. Municipalities, for example, are much less dependent on property tax revenues than are school districts; counties are more dependent on

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TABLE 1 Local Revenue Sources (in millions) A. Nonconstant Dollars 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 58,235 105,243 179,045 281,045 410,347 573,255 General Revenue Own sources 38,045 65,549 102,214 164,426 254,062 357,268 —Taxes 29,074 49,739 74,852 103,783 158,216 227,099   76.4% 75.9% 73.2% 63.1% 62.3% 63.6% —Property tax 25,186 41,620 60,267 78,952 116,618 171,723   86.8% 83.7% 80.5% 76.1% 73.7% 75.6% —Individual income tax 926 2,241 3,752 5,078 7,716 11,106a   3.2% 4.5% 5.0% 4.9% 4.9% 4.92% —Sales and gross receipts 1,956 4,268 8,278 14,824 24,455 41,263   6.7% 8.6% 11.1% 14.3% 14.3% 18.2% —Charges and miscellaneous 8,971 15,890 27,362 60,643 95,846 130,169   23.6% 24.2% 26.8% 36.9% 37.7% 36.4% B. Constant Dollars 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 277,441 368,756 439,482 450,392 523,002 573,255 General Revenue Own sources 181,253 229,674 250,893 263,503 323,811 357,268 —Taxes 138,514 174,278 183,731 166,319 201,652 227,099 —Property tax 119,990 145,830 147,931 126,526 148,634 171,723 —Individual income tax 4,412 7,852 9,210 8,138 9,834 11,106a —Sales and gross receipts 9,319 14,954 20,319 23,756 31.169 41,263 —Charges and miscellaneous 42,739 55,676 67,162 97,184 122,159 130,169 a 1992-1993 Note: Deflated by state and local implicit price deflator.

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TABLE 2 School District Revenues (in millions) A. Nonconstant Dollars 1983-84 1985-86 1987-88 1989-90 1991-92 Total General Revenue 109,645 129,132 149,200 175,570 199,182 General Revenue Own sources 50,492 57,997 67,963 80,970 91,720 —Taxes 41,633 48,040 56,065 65,923 76,619   82.5% 82.8% 82.5% 81.4% 83.5% —Property tax 40,341 46,777 54,611 64,285 74,630   96.9% 97.4% 97.4% 97.5% 97.4% —Charges and miscellaneous 8,859 9,957 11,898 15,048 15,101   17.5% 17.2% 17.5% 18.6% 16.5% B. Constant Dollars 1983-84 1985-86 1987-88 1989-90 1991-92 Total General Revenue 156,279 170,990 181,597 193,125 199,182 General Revenue Own sources 71,997 76,797 82,720 89,066 91,720 —Taxes 53,940 63,612 68,239 72,515 76,619 —Property tax 57,499 61,940 66,469 70,713 74,630 —Charges and miscellaneous 12,627 13,185 14,485 16,553 15,101 Note: Deflated by state and local implicit price deflator.

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TABLE 3 County Revenue Sources (in millions) A. Nonconstant Dollars 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 12,472 23,652 41,441 66,272 101,229 146,495 General Revenue Own sources 7,451 13,697 22,654 38,350 63,989 92,098 —Taxes 5,702 10,076 15,865 22,917 37,240 54,926   76.5% 73.6% 70.0% 59.8% 58.2% 59.6% —Property tax 5,253 8,625 12,888 17,711 27,362 40,808   92.1% 85.6% 81.2% 77.3% 73.5% 74.3% —Sales and gross receipts a a a 3,660 7,005 10,155         16.0% 18.8% 18.5% —Other 449 1,452 2,976 886 1,872 2,422   7.9% 14.3% 18.8% 3.9% 5.0% 4.4% —Charges and miscellaneous 1,749 3,619 6,789 15,434 26,748 37,171   23.5% 26.4% 30.0% 40.2% 41.8% 40.4% B. Constant Dollars 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 59,419 82,873 101,720 106,205 129,020 146,495 General Revenue Own sources 35,498 47,992 55,606 61,458 81,556 92,098 —Taxes 27,165 35,305 38,942 36,726 47,464 54,926 —Property tax 25,026 30,221 31,635 28,383 34,874 40,808 —Sales and gross receipts a a a 5,865 8,928 10,155 —Other 2,139 5,088 7,305 1,420 2,386 2,422 —Charges and miscellaneous 8,333 12,680 16,664 24,734 34,091 37,171 a Included in "Other." Note: Deflated by state and local implicit price deflator.

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TABLE 4 City Revenue Sources (in millions) A. Nonconstant Dollars 1962-63 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 13,127 19,204 34,937 60,921 91,459 130,217 171,618 General Revenue Own sources 10,459 14,121 23,502 36,746 59,823 92,476 123,466 —Taxes 7,934 10,445 17,058 26,067 37,077 55,366 75,486   75.9% 74.0% 72.6% 70.9% 62.0% 59.9% 61.1% —Property tax 5,807 7,629 10,988 15,657 19,502 27,163 39,706   73.2% 73.0% 64.4% 60.1% 52.6% 49.1% 52.6% —Sales and gross receipts 1,303 1,673 3,185 5,805 10,195 15,598 20,190   16.4% 16.0% 18.7% 22.3% 27.5% 28.2% 26.7% —Charges and miscellaneous 2,519 3,676 6,445 10,678 22,745 37,110 47,980   24.1% 26.0% 27.4% 29.1% 38.0% 40.1% 38.9% B. Constant Dollars 1962-63 1966-67 1971-72 1976-77 1981-82 1986-87 1991-92 Total General Revenue 71,420 91,491 122,414 149,536 146,569 165,966 171,618 General Revenue Own sources 56,904 67,275 82,348 90,196 95,870 117,864 123,466 —Taxes 43,166 49,762 59,769 63,984 59,418 70,566 75,486 —Property tax 31,594 36,346 38,500 38,432 31,253 34,620 39,706 —Sales and gross receipts 7,089 7,970 11,160 14,249 16,338 19,880 20,190 —Charges and miscellaneous 13,705 17,513 22,582 26,210 36,450 47,298 47,980 Note: Deflated by state and local implicit price deflator.

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TABLE 5 States with Local Option Tax Authority for Income and Sales, Selected Years 1976-1994 A. Local Income Taxes: Number and Type of Jurisdiction State a 1976 1979 1981 1984 1985 1986 Alabama             Cities 6 5 5 8 10 10 Arkansas             Cities No cities levy income taxes Delaware             Cities (Wilmington) 1 1 1 1 1 1 Georgia             Cities and Counties No cities or counties levy income taxes Indiana             Counties 38 37 38 43 44 45 Iowa             School Districts 3 21 26 57 57 61 Kentucky             Cities 59 59 59 61 67 78 Counties — 8 8 9 11 14 School Districts             Maryland             Counties (and Baltimore City) 24 24 24 24 24 24 Michigan             Cities 16 16 16 16 16 17 Missouri             Cities (Kansas City and St. Louis) 2 2 2 2 2 2 New York             Cities (New York City and Yonkers) 1 1 1 2 2 2 Ohio             Cities 385 417 n.a. 460 467 480 School Districts 0 0 n.a. 6 6 6 Pennsylvania             Cities, Boroughs,             Towns, Townships, and School Districts 2,553b 2,585b n.a. 2,644b 2,755b 2,777b Virginia             Cities and Counties No cities or counties levy income taxes Total             (excludes Pennsylvania) 535 597 n.a. 688 707 740 Total             (includes Pennsylvania) 3,088b 3,182b n.a. 3,332b 3,465b 3,517b

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State 1987 1988 1989 1990 1991 1992 1994 Alabama               Cities 10 10 11 11 11 11 18 Arkansas               Cities No cities levy income taxes Delaware               Cities               (Wilmington) 1 1 1 1 1 1 1 Georgia               Cities and Counties No cities or counties levy income taxes Indiana               Counties 51 68 79 79 76 80 80 Iowa               School Districts 57 60 52 59 144 178 379 Kentucky               Cities 85 81 84 83 87 86 94 Counties 25 27 26 27 27 29 39 School Districts             7 Maryland               Counties               (and Baltimore City) 24 24 24 24 24 24 24 Michigan               Cities 17 18 19 19 20 20 20 Missouri               Cities               (Kansas City and St. Louis) 2 2 2 2 2 2 2 New York               (New York City and Yonkers) 2 2 2 2 2 2 2 Ohio               Cities 482 481 492 506 512 512 523 School Districts 6 5 5 22 52 76 92 Pennsylvania               Cities, Boroughs, Towns, Townships, and School Districts 2,782b 2,788 2,795 2,809 2,824 2,830 2,830 Virginia               Cities and Counties No cities or counties levy income taxes Total               (excludes Pennsylvania) 763 779 797 837 873 1,021 1,281 Total               (Includes Pennsylvania) 3,545b 3,567 3,592 3,646 3,697 3,853 4,111

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B. Local Sales Taxes: Number and Type of Jurisdiction State 1976 1979 1981 1984 1986 1987 Alabama - Total 265 301 321 353 374 382 Municipalities   270 281 310 323 326 Cities   31 40 43 51 56 Alaska - Total 86 93 92 99 97 93 Municipalities   86 85 92 91 87 Boroughs   7 7 7 6 6 Arizona - Total 38 39 59 70 75 77 Municipalities 38 39 59 70 74 75 Counties - - - - 1 2 Arkansas - Total 1 1 2 60 78 111 Municipalities 1 1 2 44 59 76 Counties   - - 16 19 35 California - Total c 438 441 441 443 444 445 Municipalities   380 380 380 380 380 Counties   58 58 58 58 58 Special Districts   3 3 5 6 7 Colorado - Total 121 165 183 205 222 225 Municipalities   144 159 175 191 193 Counties   20 23 29 30 31 Transit District   1 1 1 1 1 Special District   - - - - - Florida - Total d             Counties   - - - 0 0 Transit District             Georgia - Total e 16 84 104 133 143 144 Municipalities   3 0 0 0 0 Counties   80 103 132 142 143 Transit District   1 1 1 1 1 Illinois - Total 1,342 1,359 1,359 1,353 1,376 1,375 Municipalities   1,256 1,256 1,249 1,272 1,271 Counties   102 102 102 102 102 Transit Districts   1 1 2 2 2 Water District   - - - - - Iowa             Counties             Kansas - Total 7 20 40 139 168 168 Municipalities   15 35 87 108 108 Counties   5 5 52 60 60 Louisiana - Total 183 217 251 253 287 302 Municipalities   136 152 158 177 192 Parishes   21 30 30 63 63 School Districts   60 66 65 47 47 Special Districts   7 12 18 23 23 Minnesota             Municipalities 1 1 1 2 1 3

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State 1988 1989 1990 1991 1993 1994 Alabama - Total 389 398 403 405 415 421 Municipalities 334 343 344 345 355 359 Cities 55 55 59 60 60 62 Alaska - Total 101 101 101 101 101 98 Municipalities 95 95 95 95 95 93 Boroughs 6 6 6 6 6 5 Arizona - Total 81 83 85 92 95 100 Municipalities 79 81 82 81 83 86 Counties 2 2 3 11 12 14 Arkansas - Total 142 175 185 192 244 261 Municipalities 100 120 131 136 181 192 Counties 42 55 54 56 63 69 California - Total c 446 450 460 460 461 465 Municipalities 380 380 380 380 380 380 Counties 58 58 58 58 58 58 Special Districts 8 12 22 22 23 27 Colorado - Total 235 235 236 238 242 250 Municipalities 200 200 198 198 200 201 Counties 34 34 37 39 41 42 Transit District 1 1 1 1 1 1 Special District - - - - - 6 Florida - Total d   11 23 26 39 45 Counties 10 10 21 25 38 44 Transit District   1 2 1 1 1 Georgia - Total e 155 154 165 158 160 160 Municipalities 0 0 0 0 0 0 Counties 154 153 164 157 159 159 Transit District 1 1 1 1 1 1 Illinois - Total 1,383 1,348 34 53 74 81 Municipalities 1,279 1,278 31 42 70 70 Counties 102 68 0 8 1 8 Transit Districts 2 2 2 2 2 2 Water District - - 1 1 1 1 Iowa             Counties 5 9 12 15 19 27 Kansas - Total 175 178 180 185 198 211 Municipalities 112 116 119 124 135 142 Counties 62 62 61 61 63 69 Louisiana - Total 302 325 325 327 339 340 Municipalities 193 189 193 195 203 203 Parishes 63 64 63 63 63 63 School Districts 46 47 48 48 48 50 Special Districts 23 25 21 21 25 24 Minnesota             Municipalities 3 3 3 3 5 5

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measures of need. Indeed, although studies demonstrate that the Twin Cities tax base sharing scheme has reduced intrametropolitan disparities, political agreement among local jurisdictions on what to include in the distribution formula can be expected to be difficult if one jurisdiction feels it is ceding too much. Although a municipal income tax is probably the most effective fiscal stretching policy for reducing intrametropolitan disparities, as long as suburban legislators hold sway in state capitols, a municipal income tax that taxes income at the place of employment has a low probability of being adopted.15 Until and unless suburban legislators come to the realization that their economic lifeline is dependent in some important and meaningful way on the central city's health and vitality, the prospects of approving municipal income tax legislation that can effectively tax their residents twice is remote. Moreover, if a local income tax is levied by only the central city and not by surrounding municipalities, a locational disincentive may work against the central city, potentially exacerbating, rather than reducing, intrametropolitan disparities. Gaps in Our Understanding of Metropolitan Disparities Policies directed at reducing intrametropolitan disparities are fraught with political difficulties. The key to successful adoption and implementation of any of the policies discussed above is that the participatory process of working through metropolitan area-wide issues must be legitimate, an issue not pursued in this paper (Dodge, 1996). The policies identified above have been designed with an objective of reducing, or at least addressing, intrametropolitan disparities either through stretching the political reach of central cities to a larger metropolitan area or through stretching their fiscal reach. Future research on reducing intrametropolitan disparities needs to address at least the following issues that have, thus far, been overlooked or slighted in studies: (1) local government revenue structure diversification and changing measures of taxpayer burden, (2) the effect of proliferating residential community associations on service delivery and on taxpayer burden, and (3) defining the territorial limits of metropolitan areas. Revenue Structures At a time in the evolution of U.S. local governments when they were highly dependent on a general tax (principally an ad valorem tax on land and structures) to fund their services and activities, a tax measure might have been an appropriate indicator of comparative equity. Revenue structure diversification, especially in user charges over the past two decades, calls into question the public policy utility of such a measure. Efforts to standardize measures of fiscal health certainly move in the direction of cross-metropolitan fiscal comparisons, but the

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indices often rely on government tax structures (and often the property tax) at a time when local governments have become more independent of the property tax—the major exception is school districts, however. These outmoded measures limit the reach of the analysis. A better measure of fiscal burden, which would necessarily include the full cost of all publicly provided services to each user or resident, adjusted for each citizen's ability to pay, needs to be developed. Although there is both an equity and efficiency argument for charging nonresidents for services consumed in the central city, such as public safety (police and fire), transportation (streets and bridges), parks, and other amenities, the export potential of city revenue structures may need to be reexamined. For example, cities that rely primarily on a property tax to finance their activities may not be shifting the full cost of service delivery to nonresident consumers (employees and visitors), whereas cities that attach a fee or charge to city services may be capturing revenue from nonresidents. Cities with an earnings or commuter tax, however, may be exporting this tax to a low-income nonresident, thus potentially violating horizontal equity among similarly situated income earners who live in separate political jurisdictions in the same metropolitan region. This line of research would build on the already substantial body of literature that examines the mismatch hypothesis (see, among others, the paper by Ihlanfeldt in this volume). The purpose would be to extend the analysis to include the tax equity and service delivery issues in the metropolitan area. Are jobs located in municipalities that impose a fiscal barrier (tax equity) or a service barrier (e.g., transportation systems) on workers? The Role of Quasi-Local Governments in Intrametropolitan Disparity Increasingly, residential community associations are created as providers of traditional government services within municipal boundaries (see McKenzie, 1994; Dilger, 1992; U.S. Advisory Commission on Intergovernmental Relations, 1989). Nearly 30 million Americans reside in housing under the control of residential community associations, with an undetermined number who are also citizens of a municipal corporation. The proliferation of residential community associations in the past decade, and the projection that by the year 2000 there will be approximately 225,000 common-interest developments, or CIDs as they are formally known, raise a number of questions for reducing intrametropolitan disparities. First, because residential community associations have quasi-governmental powers to tax (all property owners are required to contribute an annual fee), residents of these communities who reside within the political boundaries of municipal corporations are receiving in many cases a higher level of services than other residents. Studies of metropolitan service delivery levels and tax burdens routinely ignore these "add-on" services, even when they duplicate or add to existing municipal and local government services (e.g., policing, sanitation, street sweeping, zoning enforcement). Without the cost of these "volun-

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tary" contributions, average taxes per capita (a surrogate measure in Ladd/Yinger and other studies for revenue-raising capacity), understate actual contributions for service delivery because these measures do not include contributions to residential community associations. Consequently, without factoring these contributions to a quasi-local government into the measures of fiscal health or disparity, studies that conclude that local services tend to be provided equitably regardless of neighborhood income might not be entirely accurate. Although indicators of tax burden and of service consumption might suggest a pattern of equity, ignoring the nontax contributions to quasi-governmental services (e.g., rental security agencies, additional garbage collection and street sweeping, zoning enforcement) may skew the analysis considerably. The preponderance of residential community associations in suburban municipalities compared with their presence in central cities might make the intrametropolitan disparities in services and in financial burden between central-city and non-central-city residents substantial. Space and Mobility in a Federal System Policies on stretching political boundaries and fiscal boundaries are built around the immutable fact that federal republics are layered with overlapping governments, each of which exercises authority within a finite space. Unlike the India model, in which state boundaries change as migratory patterns and settlements change, political boundaries in the U.S. federal system change only at glacial speed, if at all. How a metropolitan region has become defined, then, tends to rely on fixed political boundaries that may or may not reflect any one person's understanding of today's "real" boundary (see also Warren, 1974). As Haar questioned long ago, why should geopolitical service delivery regions be expected to remain static? Metropolitan reform through consolidation or two-tier governments or tax base sharing may address some concerns over intrametropolitan disparities, but the policies also have a downside, namely, their dependence on fixed political boundaries. Counties were carved out of states as administrative units designed to be accessible to the people, and their boundaries rarely change. But metropolitan development does not confine itself to the niceties of boundary drawings. Migration and settlement patterns can easily step over those boundaries and remove themselves from the control of consolidated service delivery districts. Not only has this happened to nineteenth- and twentieth-century American municipal corporations via railroads, trolleys, buses, and automobiles, but it is also happening in the late twentieth century to regional corporations. Pierce reports that Metro Toronto, the two-tier municipal governmental system in Canada (which became a unified city in 1998 under Bill 103 of the Province of Ontario, The City of Toronto Act of 1997), now contains only slightly more than half the total metropolitan population; ditto for Indianapolis and Unigov. His lament is that "[t]here's no single regional leadership to plot economic advances, to speak

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out for mass transit or other measures to prepare Indianapolis for the 21st century" (Pierce, 1996:2654). In other words, population growth has already leapfrogged over Metro Toronto's and Unigov's legal boundaries, exacerbating the prospects once again for intrametropolitan disparities. Final Note Municipal government reform movements in the past were motivated by political or economic crisis. The corruption of cities in the late nineteenth and early twentieth centuries provided much grist for the reform mill; the economic and fiscal pressures on central cities in the post-depression era did the same. Nevertheless, the powers to change municipal and metropolitan government boundaries rest with states, which have the power to create and alter local governments, and in some cases with local citizens, who have the voting power to make regional governance a reality or not. The prospects of an affirmative action toward metropolitan governance at either place is remote, so long as state legislatures do not represent cities' interests and so long as suburban residents see no relationship between their corporate welfare and the welfare of their central-city brethren (on this point, see especially Orfield, 1997). Enlightened leadership at the state and local level, coupled with persuasive models of regional governance, might overcome the political resistance to political and fiscal stretching policies designed to reduce intrametropolitan disparities. Peterson persuasively reminds us that a city's influence is severely circumscribed by the space over which it operates and has legal jurisdiction (Peterson, 1981). His observation on the limits or reach of city government control extends to metropolitan or regional governments as well. Just as states limit the reach of municipalities, so are the spatial and legal limits of metropolitan or regional governments also controlled by the states. Federal systems with inelastic local-government political boundaries will eventually confront the fiscal and economic realities of shifting populations. Mobility within and among metropolitan regions has implications for reducing or exacerbating intrametropolitan disparities. The challenge to policy makers at the state and metropolitan levels is to build public support around political and fiscal stretching policies that address the broad issues of intrametropolitan disparities without compromising the objectives of a federal system. Acknowledgments I am indebted to Hal Wolman, Julian Wolpert, Alan Altshuler, other committee members, and anonymous reviewers for comments on an earlier draft of this paper. I would also like to thank Richard Campbell and Dan Durning of the Carl Vinson Institute of Government at the University of Georgia for contemporary information on consolidation efforts. The research assistance of Pain Van

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Zwaluwenburg is gratefully acknowledged, as is the able assistance of Andrew Dudas, who researched the section on Ohio's municipal income taxes. References Akron Chamber of Commerce, Bureau of Research 1959 Municipal Income Tax Study: A Revenue Study of the City of Akron, Ohio. Bahl, Roy 1980 Alternative approaches to regional financing of urban public services. Pp. 447-469 in Financing the Metropolis, Kent Mathewson and William B. Neenan, eds. New York: Praeger. Bahl, Roy, Jorge Martinez-Vazquez, and David J. Sjoquist 1992a Central city-suburban fiscal disparities. Public Finance Quarterly (October) 20(4):420-432. 1992b City finances and the national economy. Publius: The Journal of Federalism (Summer) 22(3):49-66. Barnes, William R, and Larry C. Ledebur 1994 Local Economies: The U.S. Common Market of Local Economic Regions. Washington, DC: National League of Cities. 1997 The New Regional Economies: The U.S. Common Market and the Global Economy. Thousand Oaks, CA: Sage Publications. Bell, Michael 1994 Tax-base sharing revisited: Issues and options. Pp. 151-173 in Fiscal Equalization for State and Local Government Finance, John E. Anderson, ed. Westport, CT: Praeger. Berman, David R. 1995 Takeovers of local governments: An overview and evaluation of state policies. Publius: The Journal of Federalism (Summer) 25(3):55-70. Blomquist, William, and Roger B. Parks 1995 Fiscal, service, and political impacts of Indianapolis-Marion County's Unigov. Publius: The Journal of Federalism (Fall) 25(4):37-54. Bradbury, Katharine L, Helen F. Ladd, Mark Perrault, Andrew Reschovsky, and John Yinger 1984 State aid to offset fiscal disparities across communities. National Tax Journal (June) 37(2): 151-170. Bureau of the Census 1995 Government Finances. Washington, DC: U.S. Bureau of the Census. Burns, Nancy 1994 The Formation of American Local Governments. Oxford: Oxford University Press. Carl Vinson Institute of Government, Government Research and Services Division 1989 The Impacts of City-County Government Consolidations: A Review of Research Findings. Athens, GA: University of Georgia. Chernick, Howard, and Andrew Reschovsky 1995 Urban Fiscal Problems: Coordinating Actions Among Governments. Madison, WI: LaFollette Institute of Public Affairs. Dilger, Robert Jay 1992 Neighborhood Politics: Residential Community Associations and American Governance. New York: New York University Press. Dodge, William 1996 Regional Excellence: Governing Together to Compete Globally and Flourish Locally. Washington, DC: National League of Cities.

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    intrametropolitan inequities than are either formal regional governments or ad hoc interlocal (voluntary) agreements. The Atlanta Project (TAP) was begun by former President Jimmy Carter and funded primarily from industry and foundations for the purpose of "accomplishing social goals associated with poverty, including teen pregnancy, childhood immunization, school dropout rates, and crime and violence" (Wallis, 1994:304). It provides services to 20 neighborhood clusters in 3 counties in the Atlanta metropolitan region. Each neighborhood cluster has a corporate sponsor and designs programs to address poverty-related problems (e.g., teen pregnancy, violence, school dropout). Rich argues that the solution to municipal social problems, such as Atlanta's, ought to shift from being a responsibility solely of city hall to one that includes the nonprofit sector (see Rich, 1993; Giles, 1993). Nonprofits, unlike municipalities, are usually not constrained by the political boundaries of the municipal corporations. Consequently, they can reach out beyond the central city to the broader metropolis. Moreover, he argues that, in an environment in which the likelihood of substantial federal or state support is remote, partnerships between local governments and nonprofits not only fill the breach, but also, because they spring from local concerns, are more likely to be tailored to local problems. Programs such as the Atlanta Project have spread and have been supported by a number of large foundations, such as the Annie P. Casey Foundation, the Rockefeller Foundation, the Pew Charitable Trusts, among others, and have been implemented in cities and metropolitan regions across the country. 8   Under the state's Municipal Annexation Act, cities over 100,000 population are allowed territorial dominance for five miles beyond the corporate limits. In this extraterritorial jurisdictions, cities "can impose subdivision regulations, approve the creation of MUDs [municipal utility districts], designate tax exempt 'industrial districts,' and prohibit new incorporations" (Thomas, 1993:289). 9   Correspondence with Dan Durning, Carl Vinson Institute of Government, University of Georgia, January 31, 1997 (updated to include two referenda defeated in November 1996). In testimony before the Senate Committee on Intergovernmental Relations, El Paso, Texas, April 1, 1996, Terrell Blodgett, Professor of Urban Management at the University of Texas School of Public Affairs, counted four likely elections for city-county consolidation and eight studies under way in 1996. 10   Testimony of Terrell Blodgett, p. 6 (see note 9). 11   Yet on the basis of their own data of residents' subjective ratings of services, the only substantial discrepancy in ratings is in the education function, which is only one of two services rated (the other was police). One might just as easily speculate that consolidation has reduced the disparity in perception between residents of the pre-Unigov city and the other residents over how well schools were performing because the data are not longitudinal ratings of satisfaction. 12   Bell (1994) argues the purpose is also to rationalize land use planning, an issue not discussed here. 13   In a similar vein, Fischel contends that the Serrano decision in California may have actually caused the tax revolt (Proposition 13) by forcing wealthy school districts to raise their own property tax rates even while state equalization grants in response to Serrano were redistributing more aid to poorer school districts (see Fischel, 1989). 14   Pennsylvania also allows an income tax, but nonresidents cannot be taxed at more than 1 percent regardless of the city's income tax (excluding Philadelphia). 15   This is an admittedly very tenuous conclusion because no comprehensive study of the effect of Ohio's municipal income tax on intrametropolitan disparities has been conducted.