LOCAL GOVERNMENTS CALIFORNIA FACING FISCAL PRESSURE

Local governments California facing Fiscal Pressure



Local governments California facing Fiscal Pressure

Introduction

There has been a recent and engaging debate concerning “big questions” in the fields of public policy and administration. Behn (1995) argues that big questions revolve around micro-management, motivation, and measurement. In turn, Neumann (1996) suggests that the big questions revolve around the structure and dynamics of public organizations that exist in an environment of complexity and chaos. Perhaps the most insightful set of questions—at least for this work—comes from the formulation by John Kirlin (1996). Kirlin argues that for a question to be “big” it must address the issues of achieving a democratic polity, understanding social values and complexity, and the encouragement of social learning. From these criteria, he defines a series of questions, several of which directly address the institutional design of local government. In particular, he argues that the major concerns that face our communities are questions of the design of the instruments of collective action, tradeoffs between governmental structures based on function and geography, how society gains knowledge of choices, and consequences, and how to achieve goals. The extent of the existence of local government autonomy influences the answers to these questions. There are multiple definitions of local government autonomy (LGA).

Local governments California facing Fiscal Pressure

The simplest, from Wolman and Goldsmith, (1990), defines local autonomy in terms of politics and essentially defines this concept as the government's ability to have an independent impact on the welfare of the residents of the local jurisdiction. Some years later, Boyne (1996) expanded this definition by explicitly including within local government powers the ability to innovate, experiment, and develop policies that can vary by jurisdiction. Boyne argued that local governments should have enough autonomy to compete with each other in terms of service quality and quantity. Also in 1996, Kirlin further expanded the concept by changing government to governance, and defining governance capacity as the ability to make and carry through collective choices for a geographically defined group of people.2 Kirlin also argued that governance capacity includes more than any single government, but rather it is shaped by public laws, the interaction with other governments, and the availability of civic infrastructure. The first part of this paper will continue the extension of the definition of local autonomy, and then examine why this concept is important with respect to Tiebout models. Within this part will be an explanation and extension of the theoretical constraints on local autonomy. The second part of this paper will discuss one of the necessary conditions for local autonomy to exist—local fiscal autonomy. This concept will be defined and elaborated and then utilized to illustrate the effects of fiscal stress on local autonomy. The third part of the paper will empirically examine the effects of fiscal stress on local autonomy in California after the passage of Proposition 13, a dramatic tax cutting law. Parts four and five of the study will examine the state-local-judicial-private sector roles in ...