To understand the underlying structure of any county, city, municipal or town budget or fiscal situation, it is necessary to inquire how much legal power a local community has over its own ability to pass laws, tax and spend.
Across America, there are multiple power configurations flowing from state to local governments: These matter tremendously in terms of how communities can solve problems and respond directly to change. Many local governments are caught in a tug-of-war with state and federal entities over their ability to self-govern. Some call for greater autonomy, positing that local governments are uniquely positioned to respond to the needs of their constituents. Others say local governments lack the technical expertise and management to effectively carry out public programs.
The state-versus-local dynamic traces back to a legal principle favoring state over local powers, known commonly as “Dillon’s Rule” (named for a 19th-century judge by that name whose jurisprudence on the issue has been cited by the Supreme Court). Dillon’s Rule asserts:
A municipal corporation possesses and can exercise the following powers and no others: First, those granted in express words (from the state); second, those necessarily implied or necessarily incident to the powers expressly granted; third, those absolutely essential to the declared objects and purposes of the corporation — not simply convenient, but indispensable; and fourth, any fair doubt as to the existence of a power is resolved by the courts against the corporation.
American states are commonly categorized as either Dillon’s Rule or “home rule” states; 39 states now allow for home rule at the local level, though not every county or municipality chooses to exercise these enhanced powers. More than 50 million Americans live in small townships, which more often than not operate within Dillon’s Rule states — particularly in the Midwest — meaning they have limited power to legislate. Meanwhile, major American cities such as Boston, Chicago, New York, Atlanta, Seattle and Denver all have different degrees of power relative to their state governments. Where home rule flourishes in states such as New Jersey, the high degree of local autonomy is sometimes worn as a badge of freedom, while also criticized for creating inefficiencies, as hundreds of relatively small municipalities end up creating their own schools, police and myriad service departments.
In terms of hard data, what sorts of spending outcomes does home rule typically lead to? Surveying Florida’s counties over a span of 30 years, Jaclyn Bunch of the University of Southern Alabama looks to understand the impact of greater autonomy on spending priorities. Florida serves as an ideal case study, she says, as it provides a robust mix of counties that have adopted a charter (and therefore have greater home rule) and those that do not. In her 2014 study published in State and Local Government Review, “Does Local Autonomy Enhance Representation? The Influence of Home Rule on County Expenditures,” Bunch notes that 20 of 67 counties in Florida had adopted a home-rule charter as of 2009, giving them, under state law, the “ability to pass local laws and assess additional fees and/or taxes.” Bunch sets out to answer the question of how this nominal flexibility at the municipal level is used by communities, specifically: “Does charter governance increase expenditures and do those expenditures favor liberalism?”
The study’s findings include:
- Liberal-leaning counties with a charter that allows them to self-govern are more likely to spend on redistributive programs — on welfare, health, mental health and other human services — than their liberal counterparts that lack a charter.
- A county of 100,000 people with a moderately liberal population (around 50%) would spend approximately $636,000 more a year on redistribution.
- Even conservative counties that have a charter spend more than their counterparts.
In conclusion, Bunch notes that “possession of charter-based discretion bestows on counties the ability to more adequately reflect the desires of constituents through their expenditures.” She suggests that future research elaborate on why charter counties are able to pursue ideological agendas better than their non-chartered counterparts.
Related: A 2010 Public Administration Review study “Examining Small Town Revenues: To What Extent Are They Diversified?” also looks at how state-local governance dynamics affect the way money is collected and spent at the community level. The researchers find that “state-imposed tax and expenditure limitations, as well as home rule provisions, affect levels of revenue diversification among towns.” For example, small towns (those with traditional town meetings, as opposed to states and municipalities) often have no capacity to levy sales taxes, making it more difficult for them to raise revenue outside of property taxes.
Keywords: municipal government, local government, autonomy, management, Florida, charter, county, home rule