Are American Local Governments out of Control?

Depending on where you live, the Feds may be the least of your concerns

ANYTOWN, USA – The fact that government is too big and spends too much is not contested by many Americans. The reality of a nearly $17 trillion debt and over $200 trillion in unfunded financial obligations is too stark to ignore. But one topic we’ve avoided is that increasingly it is our local governments that are wasteful, oversized and corrupt.

But cutting local government is often where the hardest political battles are waged. 

Consider the case of Illinois: In an effort to rein in government spending and control debt, they have significantly cut state and local government positions.  However, Illinois has designated ‘special’ districts, which come with their own tax collecting entity.

Illinois has 3,200 of these districts, including districts specifically for parks, fire protection, drainage, and mosquito abatement, among others, with plenty of redundancy. Some counties have over a dozen districts, all collecting taxes.

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In a recent article, Bloomberg detailed how these special districts are often redundant and sometimes obstruct one another. The piece details how these positions are often staffed with cronies, and sometimes with salaries exceeding that of top state officials.  With a debt of $7.5 Billion and a large pension deficit, these special districts are quite literally bleeding Illinois dry.

Local revenue collection exceeded billions of dollars in Illinois, even as some districts routinely kept large cash balances.  The Civic Federation, a Chicago-based nonprofit which tracks state and local finances, called it “a violation of the public’s trust” to levy property taxes on individuals when the local governments have surpluses of revenue exceeding one year’s expenditures.

The Illinois Model

Illinois is unique because of its strictly defined roles for local governments. The state authorized the creation of special districts in order to grow government without having to change the state constitution.  In most other states, local governments may have less revenue collecting bodies, but they tax and spend just as heavily as Illinois.

WATCH: Is the spending battle over and are higher taxes on the way? 

It is the local governments which spend their budgets early for roads or snow removal. When a locality runs out of money, it goes to the state, and when the state is short on funds, it goes to the federal government. This has been the damaging routine in every state in this country for some time. It is your local government that wastes tax revenues, and then must lobby for more state and federal funding for things like education and infrastructure.

A recent case in Winsted, Connecticut exemplifies the potential for corruption.

Henry Centrella, Jr., the town’s former finance director, embezzled over $2 million of tax payer money to finance a double life he was leading in Florida. The incident has left the town in a position where it may have to close its public schools or borrow $2.5 million from a bank. Unbelievably, this went on for four years. Where was the oversight? “We had every reason in the world to trust him,” said the town manager, Dale Martin.

Since when is tax payer money accounted for on trust? Winsted is the perfect picture of government ineptitude. When government is too large, it becomes harder to account for, that’s when corruption becomes easier.

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Federal spending is a concern that needs to be addressed. But Americans ought not to forget that the most effective reforms often start locally.  If we don’t scale back the size and purse strings of local governments they will continue to spend unwisely and in excess. It is easier to consider cutting something that doesn’t immediately affect you, but if we want to truly reverse this trend of deficits and debts, we need to consider where we can start at home.

About the Author: Keith Farrell is a frequent contributor to The Libertarian Republic and founder and president of Spirits of ’76 nonprofit organization.  He graduated with a BA from the University of Connecticut in American Studies and Urban & Community Studies.  Follow him on Facebook.

2 comments

One rude dude. October 29, 2013 at 1:20 am

No local governments are not in control far from it. It is the worthless people of our country that are completely out of control. They are brainless lawless and the sewer stench of society.

Mitchell Bupp October 29, 2013 at 4:31 am

I would point out that the state governments enable local governments to destroy our rights. Here in Franklin County, VA if you want to scrap metal you must get a permit from the county for $25 and consent to being searched anytime the authorities feel like it. And you can not have been convicted of a crime of moral interputide…… this is in allignment with a new state law here in Virginia.

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