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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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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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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.
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Notes
1
Gyourko and Summers (1997) note that large cities (over 300,000population) spend 30 percent of their own-source revenues on health, hospitals, and public welfare, compared with only 9.1 percent for smaller cities (under 75,000 population) Pack (1995) found that on average cities spend 3.5 percent of their own-some revenues on unreimbursed ''poverty'' programs (excluding hospitals), but that Philadelphia spent 7.6 percent in 1995 (see also Salins, 1993).
2
For an opposing view, see Hill and Wolman (1995).
3
Much research has centered on the efficient production of local government services, which certainly needs to be factored into any discussion about tax burden. Productivity has received popular attention with the publication of Osborne and Gaebler's Reinventing Government (1992).
4
It should be noted that some special districts, such as sewer and water authorities, mass transit districts, and gas and electric utilities, are usually denied access to any general tax, but rather are restricted to a user charge for revenue generation.
5
Ladd and Yinger's measures are presented because they are more accurate measures than others. The representative tax structure, developed by the U.S. Advisory Commission on Intergovernmental Relations, is premised on measuring fiscal capacity as equal tax rates, ignoring tax burden (defined as taxes as a percentage of wealth). For a review of other budgetary and economic measures of fiscal health, see Bahl et al. (1992a:420-432 and 1992b:49-66).
6
This variation in service responsibilities was an important factor in Fuchs's finding that New York City's fiscal condition suffered more than Chicago's (see Fuchs, 1992).
7
Addressing issues of intrametropolitan disparities, according to some analysts, cannot and should not be left to the local governments in question. Nongovernmental organizations, such as the Atlanta Project, the Providence Plan, and many others, may be more successful in addressing
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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.
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