The State and Strong Towns

At the end of this past month, states across the nation struggled to pass their budgets for the upcoming year. They faced the same problem the last time around (significantly reduced tax revenues), but were able to shore up their budgets with federal stimulus money. This time around, the stimulus is gone and states were left to figure out how to fill the gaps in some other way.

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For those of us in Minnesota, we have the distinction of being the only state unable to figure it out before the deadline. We’re just finishing up nearly three weeks of a government shutdown that is finally being resolved (well, sort of) by depending largely on more one-time sources of money.

The political and philosophical battles around Minnesota’s budget are not substantially different than what has been seen in other states. Some want to fill the gap with additional revenue – others want to make substantial cuts to government programs. In the end, the political compromises often involve a little of both, but also a fair amount of “kicking the can down the road” by infusing other sources of unsustainable revenue. We’ll go borrow money. We’ll shift money from this account and pay it back when things get better. We’ll take money that was supposed to be dedicated for specific services and transfer it over to our general revenue. When all is said and done, these budget deals are usually based on a strong, bi-partisan hope that things will turn around soon so that the really tough decisions never need to be made.

In recent years, one of the more often used strategies to cut state spending has been to cut state aids to local governments. As we tell people in our Curbside Chats, these transfers of dollars from the state (or federal government) to local governments represent one of the four “mechanisms of growth” that cities have depended on in the past to make their budgets work, but which are becoming more and more unstable (at best) and possibly disappearing (at worst). Cities are finding that depending on this money is becoming a risky, and often losing, proposition.

Tonight, I am attending a meeting put on by the Bush Foundation that is aimed at bringing together regular citizens with the goal of generating ideas for how to “break the cycle of gridlock, stalemates and short-term fixes”. I’m curious to see how it comes out. I’ve certainly been to my fair share of meetings which are designed to generate new thoughts and ideas, but which degenerate into a re-hashing of the standard political messages or “pie-in-the-sky” ideas with little chance of being implemented. I'm optimistic that this meeting will involve deeper and more thoughtful ideas and I’m curious to see whether the discussion touches on any of the themes that we discuss here at Strong Towns.

Along those lines, I’d like to see what the collective intelligence of the readers of this blog could come up with. Besides the possibility of making me look more intelligent than I really am at tonight’s meeting, I thought it would be an interesting topic for discussion. Specifically, I’m curious to see how you all would answer the following questions:

• Is a Strong Town one which has the state as a stable and strong partner contributing a significant share of total city revenues?
• Or is a Strong Town one that is able to make its own independent decisions about how to generate revenues and spend money without much state support or involvement?
• If it’s a little of both, where is the line?
• Would a system which made cities responsible for more services, but provided greater revenue-producing flexibility be more likely to create political deadlock, or less? Would more local decisions prevent political posturing or would the poltical posturing begin to infuse what is now largely a non-partisan system?

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