Bruce Katz is the director of the Nowak Metro Finance Lab at Drexel University and the co-author of The New Localism: How Cities Can Thrive in the Age of Populism.
Today’s reality begs for a more comprehensive understanding of the relations between states and localities.
This post is part of a CityLab series on power—the political kind, the stuff inside batteries and gas tanks, and the transformative might of mass movements.
As many writers have chronicled, the aftermath of Donald Trump’s election has highlighted the deep political divide between economically prosperous cities and urban counties—typically overseen by Democratic mayors and county executives—and the governments of a majority of states—where Republicans control legislative chambers, governors’ offices, or both. Increasingly, these electoral divisions are spilling over into open warfare as meddling states attempt to preempt or circumscribe the ability of their cities to reflect the views of their own residents.
In many states, this power struggle has extended beyond typical hot-button culture issues like transgender rights, guns, and abortion to issues of basic economic competitiveness, like affordable housing. A 2017 report from the National League of Cities lists preemption laws targeting local minimum wage ordinances in 24 states, prohibiting municipal broadband services in 17 states, and limiting local regulation of ride-sharing in 37 states.
Advocates of local control and the progressive resistance are rightly bringing attention to state-local preemption, but that focus gives only a partial picture of the complex structural relationship between states, their localities, and their citizens. This relationship is the neglected part of federalism, which we tend to view as the tug of war between Washington and the states.
For instance, consider what it means that states, along with Washington, are key providers of the nation's safety net. The 2012 Supreme Court decision in National Federation of Independent Business v. Sebelius has led to checkerboard health care coverage, with 19 states deciding not to expand Medicaid. States vary dramatically in their support for welfare payments, nutrition assistance, public health, and supplemental income for the working poor, to name a few.
States also decide how to allocate many federal resources, often doing so in ways that undermine cities and urban counties. Consider Alabama's decision to proceed with a major reconfiguration of Interstate 20/59—expanding a six-lane elevated freeway to a 10-lane monstrosity and reducing access to the downtown from three exits to one. Clearly, 1960s-style transportation solutions are alive and well. This is just one way out-of-touch state interests can preempt local know-how and disserve quality of life.
As states intercept certain privileges, they fumble others. They were traditionally the centers of economic development, investing in public university centers of excellence, technology transfer, and trade-oriented efforts around boosting exports and foreign direct investment. But in recent years, states like Pennsylvania have dramatically scaled back these efforts, forcing Philadelphia and Pittsburgh to pick up the slack.
Most fundamentally, states (and state constitutions) set many of the basic rules of local governance. They determine whether the boundaries of cities and municipalities are flexible or fixed, constraining not only expansions of land but also of the tax base. They also determine what taxes cities can impose on their residents: Currently 42 states constrain local fiscal authority through tax and expenditure limitations, which can sharply restrict a local government’s ability to raise revenues. States broadly decide what powers to delegate to which levels of municipal or regional government. And they assert control over the quality of local economic growth through investments in K-12 schools, higher education, and workforce development.
But here in the structural arena, the neat political divisions break down. Some red states have progressive governance starting points; for example, laws enabling their cities to annex suburbs and grow a robust fiscal base. At the same time, many blue states have rules that keep cities and suburban municipalities small and weak—"little boxes with limited horizons," in the memorable words of David Rusk.
In many ways, red Texas is more structurally progressive than blue Connecticut. Its major cities have large footprints—Houston’s land mass is 610 square miles—and a broader tax base with more residents, more homes, more companies, and more consumer establishments. Hartford, on the other hand, sits on just 18 square miles and has a large concentration of poverty; it’s literally too small to succeed. This is particularly true in cities that are also state capitals, as Hartford is, dense with buildings and institutions that are exempt from tax.
Today’s reality begs for a more comprehensive understanding of the relations between states and localities. One idea for how to start: Convene an independent blue-ribbon commission to examine the status quo and champion reforms.
These reforms should particularly focus on how cities and counties address the dramatic fiscal pressures that accompany the decline in federal discretionary spending and the rise in local pension and other liabilities. Some models for adapting these challenges are already being tried and tested in the U.K. and Northern Europe. In Manchester, England, for example, community deals enable cities to move resources across siloed health and services programs. In Copenhagen, public authorities like port authorities have been restructured to leverage the value of underutilized public land and buildings for infrastructure finance. Denmark also created a negotiated budget-making process between state government and municipalities.
Cities and localities’ constituency groups could organize a commission to advance these kinds of reforms by seeking funding from philanthropy and participation by community leaders who have not succumbed to our current poisonous partisanship.
Whatever the way, the nation needs to reclaim the sensible center, and the neglected side of our federal republic is a good place to start.