July | August 2017

By Clarence E. Anthony
Few at the state or federal level would disagree that cities are the engines of economic growth and innovation in our country. That’s why the National League of Cities’ central message to our federal partners this year is to “Go Local” with policies that leverage city leadership and support much-needed local projects.
In a recent NLC survey sent to state municipal leagues around the country, respondents overwhelmingly identified maintaining existing or building new infrastructure as the most pressing issue concerning local communities’ quality of life and economic vitality.
It’s easy to see why. Cities hold the key to our national economic vitality by creating centers for people to live, work, learn and do business. In order to continue to be effective in this role, and to keep people and goods moving, cities require a safe, seamless and modern infrastructure system.
But at the end of the day, there is no escaping that cities are creatures of state government, subject to state fiscal and regulatory systems that can either support the very economic activity cities facilitate or inhibit it through onerous, unfunded mandates or misaligned priorities.
Cities and States: Tied Together
As an example, cities are continuously working to maintain and build out their transportation infrastructure systems. This involves efforts to make streets safer and accommodating to different modes, including alternative forms of transportation such as biking and walking.
Cities, however, often experience tension with their state Department of Transportation partners, who have different, more traditional ideas about streetscape and community design. Given that state DOTs typically control the purse strings for many aspects of transportation projects, including those at the local level, these differences in planning philosophy can result in an impasse.
Another policy issue that commonly comes between cities and their state partners is the build-out of municipal broadband networks. Local-level projects that increase broadband availability, affordability and adoption need state-level support. That support can come in the form of access to open networks, state rights of way, “dig once” policies and facilitating coordination.
To date, 19 states have erected policy and legislative barriers that discourage or prohibit community broadband projects. Since broadband network development tends to occur at the local level, states that avoid placing restrictions on who can own and operate a broadband network leave more options open for local entities to implement innovative, context sensitive solutions.
At a time in our economic history where access to information is paramount to prosperity and economic innovation, state partners must play a supportive rather than prohibitive role in building out crucial municipal networks that can help close the digital divide in our nation.
What Relationship Works Best?
Research on state-local fiscal policy indicates that greater flexibility for localities, given appropriate controls by the state, tends to be superior policy. The policy implications for the National League of Cities and our state league partners are straightforward.
For state policymakers, there are clear policy levers that can improve the fiscal and economic vitality of local governments. At the most basic level, those levers include protecting local funding and providing more local tax authority—which were among the most cited responses to our state league survey on 2015 legislative priorities.
Maintaining and/or increasing state aid levels, particularly where state aid reduces inequities within the state, is another critical step, particularly as cities struggle to recover from the economic downturn. Pressures to pass tax and spending limits in state legislatures and via state ballot measures has become a permanent part of the political landscape of state and local government, whether it is the progeny of California’s Proposition 13 or Colorado’s Taxpayer Bill of Rights, or more recent efforts in numerous states.
State and local policymakers should resist the easy temptation of providing tax relief by undermining local fiscal capacity, and look to the economic ramifications and unintended consequences experienced by those states where state-level tax and expenditure limits are most restrictive.
Underscoring every position we take at the National League of Cities is that, ultimately, policies are only as strong as the good they do in our nation’s communities. Our members recognize the critical importance of a strong state-local partnership that facilitates investment in and provides a strong foundation for local innovation and growth in all sectors of
the economy.
Clarence Anthony is the CEO and executive director of the National League of Cities, the nation’s oldest and largest membership organization for municipal officials. Anthony served for 24 years as the mayor of South Bay, Fla. He also has served as president of the Florida League of Cities and the National League of Cities and as the international voice for local governments in his role as international manager of United Cities and Local Governments in Barcelona, Spain.