We Nickel and Dime You to Death 

Government Belt-Tightening - 5 Cents
Posted by: Paul Nichols

25 Jan 2010

Local governments all across the country are trying to tighten their belts and reduce their budgets to deal with the downturn in the economy.

Why are they doing this? You'd think it'd be because their citizens really need the break in taxes. It may be that governments are reducing expenditures because local voters have asked for it. But property taxes are more or less stable every year, and a citizen's income has no effect on how high the taxes on his house are from year to year. So there's only so much motivation for a local government to make the really tough decisions to reduce a budget.

More likely, local governments are motivated to make the tough decisions because of pressure from state government. States' income tax and sales tax collections are not meeting expectations to the tune of hundreds of millions of dollars, and therefore states are cutting the funds they give to local governments. So local governments are finally talking more about radical changes.

The NJ Star-Ledger discusses a small effort in New Jersey by towns to share services or to centralize service provision at the county level. Certainly this is a song sung before. It's partly why counties exist, anyway.

But the key to the article is the acknowledgment by a county official that home rule state statutes may have to change. What is home rule? Ask anybody. Nobody can tell you. Wikipedia, our sister site, botches it big time. I barely know. Here's my shot: a local government (in many States) can only do what the state constitution allows it to do. Or maybe: a state reserves for the locality those powers not specifically reserved for the state (think mini federalism). As such, any town that wants to do anything radical must first have the state's permission.

So to change local government in any meaningful way, states are going to have to play a larger role. Reducing their funding to localities is a good start.

© 2010 Dime Brothers
Category: Civics 101    

Reader Comments:

State Revenue
I was sitting in a waiting room getting my tire fixed a couple of weeks ago when over the radio it was announced that slot revenue was down this year. Casinos have agreements to pay some percentage of that revenue to the state. A woman next to me said, "Why should we care about that?" So I told her that money gets divvied out to cities - so if there's less of it, it might ultimately mean your property taxes are going to go up to compensate (or your state taxes).

What's even awesomer is that states (at least Connecticut, and likely most others) set their budgets after the municipality sets theirs. So we have no idea how much money will end up coming from the state to the town, and we're left to guess and hope for the best.

And the idea of counties seems like a good way to combine services and create efficiency - I keep thinking NY's system is a good one because of that... except it often creates duplicate services as department heads seek to puff up their chests with more bloated budgets and protecting "their turf" or something. I should probably give examples but I'm too lazy.
26 Jan 2010
Maybe Home Rule's For Us!
08 Feb 2010
NY Times Finally Picks Up This Story
05 Oct 2010
The NY Times Picks This Story Up Again
24 Mar 2011

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