The Case for a Valley City
The idea of metropolitan government--a single, benevolent, expert central administration for urban areas--has tempted efficiency-minded urban theorists for generations. Such a government, they have contended, is a way of bringing order to the chaos of central cities surrounded by a crazy quilt of independent suburbs. Yet, across the country local activists have been rejecting the push to create bigger jurisdictions. They want to retain--or create--smaller governments by seceding from existing city governments; by incorporating new, smaller jurisdictions carved out of larger ones, or by resisting annexation by larger governments. Most notably, the Valley VOTE movement seeks to detach the entire San Fernando Valley from the city of Los Angeles.
The conflict between localism and metropolitan government is, at bottom, a clash over philosophy of government. To liberals, localism reflects a greedy retreat from the commonweal, sacrificing the city for the short-term improvement of the suburbs. If the suburbs shared their often considerable riches, older, poorer neighborhoods would not decline into dilapidated urban ghettos.
This view is simply wrong. Localism is popular not because it promises a sweetheart deal for a few privileged suburbanites at the expense of the greater good, or because the unsophisticated fail to understand a demonstrably superior metropolitan approach. Instead, it rests on common sense, which economics and political science amply confirm. Voters’ common sense tells them that the closer they are to government, the more it will respond to their demands.
There are good reasons to go one more step. To improve older neighborhoods in older cities requires not a single, bigger government but increased numbers of smaller ones. Rather than expanding cities, we should break them up into an array of neighborhood-based governments that would set their own property tax rates, elect their own officials and give city residents the same control that their suburban counterparts take for granted. Valley secessionist leaders make just such arguments--and they are right.
It begins with history, even though the metropolitanists assert that history is on their side. Americans, historically, have supported the creation of more local governments, not fewer. The formation of independent cities and towns fueled the explosive economic takeoff of the late 1800s; it defused tensions between immigrant and native-born, and it allowed the upwardly mobile to build communities that reflected their hard-won new social status. Independent jurisdictions are a crucial means through which a nation as diverse as the United States can develop a modus vivendi among peoples of wildly various backgrounds. And the number of local governments keeps rising. From 1952 to 1992, the number of municipalities grew from 16,807 to 19,279.
There’s no shortage of theory to explain why this long-standing American preference for localism makes sense. The key fact: We don’t all want the same things from our local jurisdictions. Those with small children may care most about education. Unmarried joggers may want to spend public money on parks. The tidy-minded may want the streets cleaned three times a week.
Forty years ago, economist Charles Tiebout contended that local governments do more than coexist side by side. They also compete for residents by offering different packages of services. Governments can differentiate themselves in terms of the kinds of services they offer and the cost efficiency with which they provide them. If they fail to provide what people want at reasonable cost, residents can leave. When municipalities lose residents, property values fall, leaving remaining residents with a powerful incentive to figure out what has gone wrong.
Temple University political scientist Daniel Elazar observes that some of the nation’s most smoothly functioning cities may owe part of their success to competition of this sort. In the Bay Area, for example, three flourishing mid-sized cities--San Francisco, Oakland and San Jose--compete (and also cooperate) with one another and with Silicon Valley towns like Palo Alto and Sunnyvale. Prosperous and efficient Minneapolis and St. Paul, along with a gaggle of cities nearby, do the same. In other words, because of this anti-monopolistic mechanism, smaller--not bigger--is more efficient.
New research from the Institute of Government at Florida International University, located in the middle of Dade County where a wave of new municipalities are being formed by breaking away from county government, soundly debunks the big-is-efficient argument that is the linchpin of the metropolitanists’ case. Milan Dluhy, a public-administration professor, examined the costs per resident for a wide range of core municipal services in metropolitan Dade County and in 24 “fragmented municipalities” within and around the county. He found that economies of scale existed in only two areas: fire protection and library services. Localities can provide all the other services--police, recreation, waste management--at equal or less cost.
In addition, as government jurisdictions get larger, control gradually melts away from voters. Realizing the difficulty of influencing officials, and increasingly impotent against the organized power of public employees, individuals give up. Growing voter apathy gives special interests a clear field to advance their own agendas, while the higher campaign spending that comes with big government allows unions and government contractors to sway officials by providing campaign funds and volunteers.
Not only are metropolitanists mistaken when they assert that bigger jurisdictions are more efficient than smaller; they are equally in error when they claim that such jurisdictions promote growth better. The reverse is closer to the truth: Metro government is more likely to discourage than to foster growth. Why?
Consider, if you will, the “golden goose effect.” Communities are willing to accept new development, the golden goose, so long as they can be sure of getting the golden eggs--strengthening their tax base and adding or improving such neighborhood amenities as schools, parks or police protection.
Metro government changes this whole calculation. Suddenly, there is no guarantee that city hall will use new tax revenues the neighborhood generates to improve the neighborhood. New developments bring a guarantee of costs but not benefits. Areas asked to accept the new industrial park may get no improved services or new school buildings; the additional tax revenue, if not simply swallowed up in the day-to-day administration of the consolidated government, may well be spent in other parts of the city, probably those with the most political clout, which will probably not be the poorer areas.
Helping poor neighborhoods is the real agenda for metro government, which at heart, its supporters believe, will help less by facilitating economic growth than by facilitating redistribution. Stripped of its pretenses about efficiency and economic growth, the metro movement turns out to be a campaign to support the municipal welfare state. Those who have fled the crime and disorder of inner cities must be joined with those who have been “left behind,” metropolitanists argue.
Instead of promising more failed redistributionism, however, breaking up the cities holds out a more valuable promise to poor neighborhoods: It offers them the means to encourage economic growth. Knowing for sure, as suburbs now do, that they will benefit directly from new investment, poor municipalities would try make their business climate accommodating. Independent municipalities will have the option of limiting regulation and accepting employment-generating businesses, even waste-recycling centers or power plants, that middle-class areas may not want, but whose financial benefits a poor community might find well worth the costs. (State and federal health and safety standards would still apply.)
Whatever the complications poor neighborhoods pose to creating a system of independent city neighborhoods, though, they should not obscure the tremendous benefits that such a system would bring to the vast majority of neighborhoods. Not the least of these would be the new political cultures that will have a chance to take root, more communal and truly democratic than today’s. Here’s how it would work.
Neighborhoods that already have their own, informal identity would become formal municipalities, empowered to set property tax rates, operate police and fire departments, make zoning and land-use decisions, pick up garbage and clean and repair their own streets. This does not, mean, however, that each municipality will, in fact, do all these things. Like suburbs, they will provide some services themselves and contract out others to either a private firm or another public entity, typically a county. Over time, individual municipalities will doubtless figure out which services should remain local, which are better provided through joint effort and what is the best way to pressure outside contractors to keep prices down. The costs and revenues of those services for which metropolitan economies of scale exist could be shared through special-purpose districts that would oversee airports, say, or libraries or arterial roads.
Some new municipalities would not have to raise all their tax revenue internally. New municipal boundaries might divvy up poor communities among more prosperous neighboring areas. Any municipal-breakup campaign will have to recognize that some sort of regional revenue sharing will have to guarantee that all areas have decent schools and adequate police and fire protection. But assuring, say, a floor below which school spending must not fall is a far cry from aiming at overall tax equalization.
What percentage of tax revenues should be shared? And who should pay it? All communities above a certain income level? Only the winnowing of the political process can provide final answers to such questions.
The neighborhoods of our big cities have long been bound together; residents think of themselves as New Yorkers or Chicagoans or Angelenos. But they also think of themselves as residents of Flatbush, Rogers Park or Sherman Oaks and, in that capacity, lack the means of exerting political control over the places they call home, in contrast to people short distances away who can exercise local influence. Perhaps the strongest argument in favor of the unthinkable possibility of breaking up the cities is that the movement to do so has already, spontaneously, begun. One metropolitan advocate has written that we should not consider the “political geography of mature metropolitan areas” to be “immutable.” Just so--but not in the way he believes.