Restoring Fiscal Health at the Local Level
Whatever long-term fiscal problems states face, most local governments have it even worse. While most states have “rainy day” funds, decent bond ratings, and plenty of revenue tools at their disposal, many cities, counties, and towns are tapped out in the bond department, lack rainy day funds, and rely heavily on volatile property taxes that have dropped along with property values. While there’s plenty of government waste at the local level, furthermore, few people can seriously argue for purely private provision of law enforcement, primary and secondary education, fire fighting and many other services that fall heavily on local governments. Without resorting to extreme measures (shut the schools), requiring state action (reform public employee pensions), doing the impossible (sell all sidewalks to a private contractor), or enacting massive growth-killing tax increases, there are still a few things that local governments might do to get their fiscal houses into order. Five follow:
1) Replace some fire departments and fire stations with ambulance services: Even as population and economic growth coupled with (until recently) ever-rising real estate prices drove up the value of America’s build landscape, the nation’s fire death rates and damage costs have dropped steadily for nearly 30 years. Nonetheless, America has kept on building fire stations. While fire agencies do keep busy, they now spend the great bulk of their time doing ambulance calls and nearly all professional firefighters are also certified paramedics. Mostly-volunteer fire departments--which still serve about half of all Americans—can do a fine job with increasingly rare calls to fight actual fires. Private ambulance companies and public “rescue only” agencies can provide emergency medical care at much smaller costs while largely volunteer forces under professional leadership can put out fires.
2) Contract out police departments: The United States may have the best policing system in the western world, but the current way of doing things is incredibly fragmented: The nation has an amazing 18,000 law enforcement agencies. Nearly all localities jealously guard local control over law enforcement and past efforts at creating regional law enforcement departments have gone nowhere. A middle ground exists. City and town councils looking to save money while retaining local control can contract out police services to state police, sheriff’s offices, and other larger agencies. The practice cuts overhead costs for big-ticket items like crime labs, computer systems, and helicopters while leaving local oversight fully intact. Many California localities have tried it and are thrilled with the results--the Moreno Valley Police Department, famous for catching internet child predators from around the country, is run under contract with the Riverside County Sherriff—and Canadian localities have also made wide use of it. Cash-strapped municipalities should try it on a larger scale.
3) Cut spending on team sports, art, and music (in that order) in public schools: When faced with budget problems, many public schools look to cut “frills.” Quite often, music and art classes end up on the chopping block. While it’s preferable to cut these areas of studies ahead of English, history, mathematics, and the sciences, it’s quite clear that students exposed to the arts are more cultured and better educated. Although cuts to arts programs make some sense, schools should also look to cut expensive team sports programs like football, baseball, and hockey. Except perhaps in Texas -- where many schools in rural areas subsidize other activities with money off of football ticket sales — these programs suck up enormous amounts of resources while proving a benefit to only a handful of “super jocks” who qualify for athletic scholarships in college and, once in a blue moon, professional contracts. Elementary school children (who rarely have school-supported sports teams to join) play little league baseball, AYSO soccer, and pee-wee football so there’s no reason to think that privately funded alternatives for older children wouldn’t quickly develop if schools stopped paying the bills for the more expensive sports. Most students wouldn’t even notice the difference—gym classes and “lifetime” interscholastic sports like cross country running cost very little and don’t make sense to cut--and, private, competitively selected high-school level teams would let the best athletes hone their skills far better than teams offered via high schools.
4) Review, consolidate, and privatize special taxing districts and independent authorities: Nearly every property tax bill in the country includes special assessments for a variety of “districts” and “independent authorities.” local governments can produce some administrative savings. But this can only go so far. While a few of these — county wide school districts — have clear purposes, many districts originally created to build parks, sidewalks, streetlights, and sewers have long outlived their usefulness. Many have the power to issue tax free bonds and then pay them off with property taxes but have little or no accountability to the public. It seems quite possible to do away with many of these authorities altogether: well-run authorities providing water and sewage could easily find buyers on the private market while the functions of sidewalk, park, library and other districts might be devolved to local governments or the private sector. Managed properly, the sale of some types of independent authorities could produce real windfalls for taxpayers.
5) Raise user fees and impose new ones: Nearly all local governments rely on some user fees. Many of these — parking meters and tolls most prominently — make obvious sense. But if they don’t cover the cost of performing an action, however, governments shouldn’t be shy about raising them. Likewise, many governments should ask people who use more services to pay more for them. There’s no reason why public tennis courts should be free to use, for example, and if localities improve arterials (some wealthy suburbs have basically built freeways themselves), there’s no reason not to levy tolls to pay off the bonds issued to create them.