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ties with similar types of assistance for all phases of urban renewal. Stato staff services such as these can do much to encourage needed urban renewal and public housing programs in small suburban jurisdictions and to point out the mutual advantages of interlocal cooperation in such programs.

9. The Commission recommends State legislation authorizing and encouraging areawide coordination and administration—through county governments or other appropriate means of vocational education and retraining programs within metropolitan areas.38

Large central cities usually constitute a single school system and have capital facilities and administrative organization to conduct adequate vocational education and retraining programs, as well as a sufficient number of potential students for efficent and relatively low unit cost operation. Individual suburban school districts, which are sometimes very small, do not generally enjoy these advantages. They lack appropriate plant or staff for vocational training either as part of a comprehensive high school or as a separate vocational institution; often there are not enough vocational students within any one district to warrant the investment. Analysis of census data indicates, however, that there are often enough such students in the suburban area as a whole to justify the investment.

State governments, by virtue of their basic responsibility for providing public education, have a key role in helping to assure adequate vocational education opportunities for their citizens inside and outside metropolitan areas. This responsibility is recognized in the soveral Federal programs of grants for vocational education, all of which require State boards of education to develop State plans as a condition for Federal grants. It is appropriate, therefore, for States to develop and administer these plans so as to help overcome deficienices in vocational education in metropolitan areas, as an important part of their responsibility for dealing with inadequacies throughout the entire State.

The States have used a variety of approaches for financing and coordinating vocational education programs. A recent summary listed six general types of "area vocational educational education programs," a term incorporated in Federal vocation education laws. They are programs provided by a school jurisdiction that has an attendance area sufficient to warrant the provision of many different training courses. Emphasis is on developing an adequate administrative unit and financial base, which may require cutting across or replacing existing governmental patterns. Under the Federal Vocational Education Act of 1963, for example, aids for construction can go only to projects which the State certifies are "area vocational education school facilities."

By adapting one or more of the organizational alternatives to individual needs and conditions, using Federal and State funds, and exercising effective supervision and coordination, States can better meet the growing need for vocational education in metropolitan areas, even if many local school districts are individually unable to provide necessary facilities and staff.

* See "Areawide Vocational and Educational Programs in Metropolitan Areas,” ACIR 1966 state Legislative Program (Washington, D.C. : October 1965), pp. 273-283.

10. The Commission recommends State legislation authorizing the use of taxing powers by area wide metropolitan service agencies carrying on functions not solely financed by user charges.

Current examples of area wide service agencies utilizing taxing powers in addition to user charges include the new transit district for the San Francisco metropolitan area; the Maryland National Capital Park and Planning Commission in its administration of a park acquisition program; port districts in Washington and Oregon; hospital districts in Texas; junior college districts in California, Florida, and Texas; and library districts in a number of States.


State action should be taken to smooth out the fiscal contours of a metropolitan landscape broken up by local government boundaries. States have primary responsibility to deal effectively with this disparity problem by providing more assistance in financing local governmental services.

11. The Commission recommends that each State examine its present system of grants, shared taxes, and authorization for local nonproperty taxes, and remove all features that aggravate differences in local fiscal capacity to deal with service requirements in metropolitan areas and that encourage or support the proliferation of local governments within these areas.

Formulas for distributing State grants and sharing State taxes can have a significant effect on the relative ability of localities to deal with their public service problems. State grants and shared taxes may also aggravate disparities by acting to proliferate local governments within metropolitan areas, whether or not these effects are intended. In some cases, a State shares income tax revenue with local governments, or authorizes local governments to impose an income tax, solely on the basis of place of residence. Wealthy citizens, in particular, are thereby given a tax incentive for leaving the central city and incorporating suburban communities in order to get a share of the State income tax and thereby lessen their property tax load. In other cases, where State grants are made to all incorporated units, there is a tendency to stimulate new incorporations without regard to whether they are in the interest of the best long-range pattern of governmental development in the area. Annexation by an existing municipality or incorporation with adjoining territory to form a much larger unit might be more desirable alternatives from the standpoint of removing or forestalling disparities in services and finances.

12. The Commission recommends that the States consider the merit of using State grant funds to equalize local property tax loads among local jurisdictions in metropolitan areas.

The property tax is the major, and in many cases the sole, source of tax revenue of local governments. In 1962, it accounted for over 87 percent of local tax revenue. The extent to which local units use the property tax is, therefore, probably a good general index of the pressure of local public service needs and the degree to which the locality is taxing itself to meet those needs. Thus, a State grant program based on property tax effort will direct funds to those communities having the most acute public service needs and showing maximum local tax effort.

13. In order to reduce educational disparities, the Commission recommends that each State make a critical review of its present school grant formula to insure that it provides for an educational level below which no community should fall. The grant formula should contain factors designed to measure as accurately as possible local tax effort and diverse community educational requirements (for example, taking into account higher per pupil costs in slum areas), and should reflect such measurements in the allocation of aid funds.37

The economic well-being of the individual is now largely shaped by the level of his educational attainment. It is critically important, therefore, to insure that the State financial contribution is geared to equalizing educational opportunity by bringing fiscal capabilities and needs into close alinement.

Over half the States have refined their measurement of local tax effort by adopting the equalized property tax assessment concept, thereby warding off any attempt on the part of local officials to receive a disproportionate share of the State's school aid fund through the expedient practice of competitive undervaluation. Seven other States have turned to some index of capacity unrelated to property values because of the lack of reasonably comparable information.

Some States have gone beyond equalization grants for the purpose of meeting educational problems in cities and suburbs. Grants are made, for example, to help finance school construction in municipalities. New York State has special programs of aid for education of non-English speaking pupils, culturally disadvantaged children, and aid for educational services to children with special behavior problems.

14. The Commission recommends that the States finance at least onehalf the cost of general assistance welfare programs, accompanied by adoption of State standards for such programs.38

The cost of public welfare assistance is borne mainly by States and the Federal Government, but concentrations of disadvantaged groups still impose major fiscal burdens on some communities. Federal, State, and local governments finance the "categorical” public assistance programs. These programs, which amounted to $4,218 million in 1963 and accounted for over 90 percent of all public assistance payments, are old-age assistance and medical assistance for the aged, aid and services to needy families with children, aid to the blind, and aid to the permanently and totally disabled. In fiscal year 1964, the Federal Government paid for 60 percent of the categorical aids. Of the total State-local share, State governments as a whole paid 80 percent, and local governments 20 percent. The smallest percentage of State participation in the non-Federal share of categorical public assistance was 44 percent in the State of Minnesota.

"General assistance" programs, however, are still a very heavy charge on many local governments. General assistance recipients are the residual group of poor who are ineligible under any Federal categorical aid program. These include needy unemployed people who exhausted or never got unemployment benefits; needy unemployed approaching 65 years of age who do not have dependent children; needy people with partial or temporary disability; mothers of dependent children over 18; needy people in nonmedical institutions; and needy people who fail to meet all Federal and State requirements in the federally aided programs. Payments for such assistance amounted to $375 million in 1964.

* A model State act for financial assistance for primary and secondary education will be included in the Commission's 1967 State Legislative Program.

* See "General Public Assistance," ACIR 1966 State Legislative Program (Washington, D.C.: October 1965), pp. 443-465.


General assistance is rooted in the basic responsibility recognized in the legal framework of all States for helping those whose resources are inadequate to meet their essential needs. States vary considerably, however, in the extent to which they participate in financing the cost of public assistance. In 1960, seven States financed general assistance and its administrative costs entirely with State funds: Alaska, Arkansas, Hawaii, Louisiana, Pennsylvania, Utah, and Washington. On the other hand, local governments in 11 States financed the program completely from their own funds: California, Florida, Indiana, Kentucky, Mississippi, Nebraska, Nevada, New Hampshire, South Dakota, Tennessee, and Texas. In 10 additional States, local funds in 1960 bore 80 to 99 percent of general assistance costs with the balance from State sources: Colorado, Georgia, Iowa, Massachusetts, Minnesota, Montana, North Carolina, North Dakota, Vermont, and Wisconsin.

The Commission believes States should finance a substantial portion of general assistance costs. The benefits of maintaining the welfare of individuals and fostering their rehabilitation spread well beyond the limits of localities in which they happen to live. Indigents tend to migrate to urban centers in search of employment, to join relatives, and, perhaps, because they know a city has a welfare program which will assure them a minimum of assistance. Indeed, some communities, particularly smaller less urbanized ones, have been known to establish strict standards of general assistance eligibility in order to encourage the poor to leave, knowing that they will probably migrate to the cities with more liberal eligibility policies.

INTERGOVERNMENTAL RESOURCES AND METROPOLITAN NEEDS The remedies proposed here are as wide ranging as the causes and effects of social and economic disparities: gaining better knowledge of existing disparities, providing lower cost housing throughout metropolitan areas, creating more jobs and strengthening the local tax base of cities that have undergone fiscal decline, adjusting governmental jurisdictions, providing more equitable bearing of costs, and equalizing local government finances through positive action by Federal and State governments.

The dimension and nature of these and other metropolitan problems are becoming clearer and the resources are increasingly available. Our Federal system of government under the Constitution provides a sound framework for meeting the social and economic problems of our metropolitan areas. The need is for continuing imagination, ingenuity, sensitivity to our neighbors' needs, and leadership at all levels of government.


This volume consolidates research and recommendations published in a series of reports by the Advisory Commission on Intergovernmental Relations. Material drawn from other sources is documented in specific references, but publications of the Commission are not generally cited. Individual chapters are based on material from the following Commission reports:

Chapter II. Metropolitan Social and Economic Disparities: Implications for Intergovernmental Relations in Central Cities and Suburbs (January 1965).

Chapter III. Performance of Urban Functions: Local and Areawide (September 1963); Intergovernmental Responsibilities for Water Supply and Sewage Disposal in Metropolitan Areas (October 1962).

Chapter IV. Relocation: Unequal Treatment of People and Businesses Displaced by Governments (January 1965).

Chapter. V. Alternative Approaches to Governmental Reorganization in Metropolitan Areas (June 1962); Factors Affecting Voter Reactions to Governmental Reorganization in Metropolitan Areas (May 1962).

Chapter VI. Governmental Structure, Organization and Planning in Metropolitan Areas (July 1961); Impact of Federal Urban Development Programs on Local Government Organization and Planning (May 1964); The Problem of Special Districts in American Government (May 1964); Metropolitan Social and Economic Disparities; Performance of Urban Functions; Alternative Approaches to Governmental Reorganization in Metropolitan Areas.

Chapter VII. Governmental Structure, Organization and Planning in Metropolitan Areas; Impact of Federal Urban Development Programs on Local Government Organization and Planning; Intergovernmental Responsibilities for Water Supply and Sewage Disposal in Metropolitan Areas; Metropolitan Social and Economic Disparities.

Several papers by Norman Beckman, Assistant Director (Governmental Structure and Functions) of the Commission, also served as useful background for the book': "Our Federal System and Urban Development: The Adaptation of Form to Function,Journal of the American Institute of Planners, XXIX (August 1963), pp. 152–167; “The Outlook for Cooperation in Metropolitan Areas," paper presented to the National Conference on School Finance of the National Education Association, Chicago, April 6, 1965; "How Metropolitan Are Federal and State Policies?" paper presented to the Annual Meeting of the American Political Science Association, Washington, September 8–11, 1965.


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