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within SMSA's than elsewhere-on a full-time equivalent basis, 248.1 per 10,000 population in SMSA's and 228.8 per 10,000 outside.

Patterns of local government employment reveal a number of other ditferences between metropolitan areas and the rest of the country. There is considerably less part-time employment in metropolitan areas. Monthly earnings are higher for local government employees in metropolitan areas than elsewhere for all of the many functions reported. Thus, full-time teachers in public school systems showed an October 1962 average of $589 within SMSA's, as against $461 elsewhere; the respective October average for full-time fire protection employees was $509 and $376; and for water system employees, $140 within SMSA's and $333 elsewhere.

REVENUES

Local governments within metropolitan areas in 1962 accounted for 70 percent of the $38.3 billion of general revenue received by all local governments in the United States. They received 27 percent. more per capita revenue (a difference of $18) than local governments outside metropolitan areas. The greatest part of this difference was due to relative reliance on the property tax. Local governments in SUSA's obtained 50 percent of their total general revenues from property taxes, whereas local governments outside SMSA's received 4:3.6 percent—a difference of $36 per capita. On the other hand, local governments in SMSA's received relatively less in State aids than non-SMSA localities: 24.7 percent and 36.7 percent, respectively, or a difference of $9 per person.

EXPENDITURES In 1962, local governments in SMSA's spent over $68, or 34 percent, more per capita than local governments outside SMSA's. The types of services associated with urban centers accounted for much of the difference. Public welfare expenditures were $16.13 in SMSA's, $9.78 outside; police protection $12.59 and $5.28; fire protection $7.79 and $2.91; sewerage $8.44 and $3.98; housing and urban renewal $59.69 and $1.61; and parks and recreation $6.13 and $1.77. On the other hand, local government expenditures outside SMSA's were greater than those inside SMSA's for highways ($22.85 compared to $18.46) and almost as great for education ($95.29 outside SMSA's compared to $97.29 inside). Education accounted for 47.7 percent of local governments' expenditures per capita outside SMSA's compared to 36.4 percent inside SUSA's.

TABLE 8.--Local government revenue, 1962

Within SMSA's

Outside SMSA's

United States

Per capita amount

Percent

Per capita amount

Percent

Per capita amount

Percent

$223. 78

100.0

$175. 06

100.0

$206. 36

100.0

Total general revenue...

Property taxes..
O:her local taxes.
State aids.
Other general revenues..

111.78
18. 41
55. 35
38. 24

50.0

8.2 24.7 17.1

76. 30

5. 74 64. 29 28. 73

43. 6

3.3
36. 7
16. 4

99.09
13. 88
58. 54
34. 85

48.0

6.7 28. 4 16.9

Source: V.8. Bureau of the Census, Census of Governments: 1962, vol. V, “Local Governments in MetroDolitan Areas," table 9.

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Source: U.S. Bureau of the Census, Census of Governments, 1962, vol. V, "Local Governments in Metropolitan Areas," table 9.

CENTRAL CITY-SUBURBAN FISCAL DIFFERENCES

More directly relevant to the question of local disparities is an analysis of central city-suburban differences. Harvey Brazer, in a study of the 12 largest metropolitan areas in the country, found that there are substantial differences between the central city and the rest of the metropolitan area in the amount spent per capita, in total, and for separate major functions such as education, highways, and welfare.

Highway expenditures were found to be slightly higher in the suburbs. Rapid population growth requiring large capital outlays for new schools also resulted in higher education expenditures in the suburbs. On the other hand, per capita expenditures for police and fire protection, welfare, health and hospitals, urban renewal, public housing, and sanitation were consistently higher in the central city than in the suburbs of these 12 largest metropolitan areas.

Seymour Sacks, in his studies for Brookings Institution, has analyzed per capita expenditures of the central city and the remainder of the metropolitan area for the 24 largest metropolitan areas of the country. In 1960, these 24 SMSA's had almost 55 percent of the Nation's total metropolitan population of 113 million. “As indicated in table 10, expenditures measured both in per capita terms and as a percent of income were almost uniformly higher for the central city than for the remainder of the metropolitan area. Per capita expenditures for the central city averaged slightly over $200, compared with $168 outside the central city.

Because of the complexities imposed by intergovernmental financing, comparison between central city and suburbs within individual metropolitan areas is more significant than an aggregate comparison of central cities (or suburbs) among metropolitan areas. Local fiscal differences between and within metropolitan areas are a result of, among other factors, (a) State assumption of responsibility for direct expenditures on such functions as public welfare and highways; () State aid in financing of education, public welfare, and, to a lesser extent, highways and health; and (c) differences in tax bases, especially the extent to which the non residential portion of the property tax base is used by local governments.

? Harvey E. Brazer, “Some Fiscal Implications of Metropolitanism," in Metropolitan 188ues: Social, Governmental, Fiscal (Syracuse: Syracuse University, 1962, pp. 61-82.

Seymour Sacks, “Metropolitan Area Finances,' paper presented at annual meeting of National Tax Association, November 1963.

Sacks' work to date indicates that the key to an understanding of local government finances in metropolitan areas is the State. In the 24 largest metropolitan areas, differences in local expenditures and taxes are far in excess of differences in income or other socioeconomic characteristics. The principal differences among metropolitan areas are the result of varying levels of State responsibility for direct expenditures and for taxes. Thus State responsibility is the most important determinant of local levels of expenditures and taxes.

The Commission's analysis of economic and social population disparities reveals that these disparities vary significantly by size of metropolitan area and region. Additional research is needed to determine if the higher expenditures in central cities of the largest SMSA's, and the importance of State financial aids, hold true in smaller metropolitan areas as well.

TABLE 10.—Relationship of local government direct general expenditures to

personal income in central cities and outside of central cities for the 24 largest standard metropolitan statistical areas, 1957

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Source: Derived from U.S. Bureau of the Census, Census of Governments, 1957, vol. III, "Governmental Finances," No. 6, “Local Government Finances in Standard Metropolitan Areas," tables 3 and 4 and Census of Population, 1960, "General Social and Economic Characteristics, "final report PC (1)-C.

DISPARITIES AND FRAGMENTED GOVERNMENT It is clear from this review that the metropolis occupies a key position in the social and economic life of the United States. Most of the people and wealth of the country are now found in metropolitan areas, and virtually all future growth is expected to take place in a metropolitan setting. Metropolitan areas have many assets that help explain their prosperity and continued expansion. This survey is not concerned solely with metropolitan resources, however, but with several factors of prime importance for government performance in metropolitan areas: the distribution of people, economic resources, and the pattern of local government.

Two major themes emerge from this overview: the existence of social and economic disparities which tend to divide metropolitan areas into distinct groupings of people; and the complexity of government structure which also tends to divide the metropolis into diverse local units.

Analysis of data from the 1960 census confirms the prevalence of significant social, economic, and racial disparities which vary in degree and direction between central cities and suburbs according to the characteristics and location of metropolitan areas.

The popular stereotype of central cities populated largely by the poor and surrounded by high-status, wealthy suburbs is subject to several important qualifications. There is much truth in this image in the large metropolitan areas and in those of the Northeast, but elsewhere the situation is different. Nevertheless, the disparities found within metropolitan areas indicate a number of gaps between human needs and economic resources in different parts of these areas.

Further constraints on governmental activity are to be found in the pattern of local government. The number of governmental units in metropolitan areas is large and still growing. The organization of government is extremely complex, with considerable diffusion of responsibility and overlapping of jurisdictions. Complexity of the governmental pattern is not a problem in itself, but it may retard the coordination of public services in urban areas and the fixing of clear lines of responsibility for policy.

Information on local government revenues and expenditures provides some insight into the impact of local problems and public efforts to deal with them. Local governments within metropolitan areas receive more revenue per capita than those in the rest of the country, but they depend more heavily on property taxes and other local sources and less on State aid. They also spend more per capita overall, mainly because of a greater need for services that are basically urban, such as police and fire protection and urban renewal and housing. Within metropolitan areas, total central city expenditures per capita are higher than those in the suburbs: Expenditures for education and highways tend to be higher in the suburbs, but most other outlays, particularly for police and welfare, are higher in the core cities.

The actual problems confronting governments in metropolitan areas will be investigated in succeeding chapters. The facts of population disparities, government structure, and expenditure patterns in themselves, however, go a long way toward explaining the conflicts of interest between local governments with different needs and varying resources. At the same time, they suggest the need for measures to overcome the frequent gaps between local needs and resources, such as government reorganization within metropolitan areas and assistance from the States and the Federal Government. Chapter III

PROVIDING URBAN SERVICES: THE CASE OF WATER

SUPPLY AND POLLUTION

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The rapid development of metropolitan areas has brought with it sharply increasing demands for public services. Population growth alone has meant that there are more schoolchildren, more commuters, and more households requiring public services than ever before. But the accelerating demand reflects more than a simple increase in the number of people. In addition to population growth, there has been a vast outward movement of people to fringe areas where public services were formerly not available or were provided only on limited scale. As a result, new government institutions had to be organized or old ones expanded to provide new school systems, utilities, and other services. Further, this growth has come at a time of rising standards of living for most Americans, and is closely associated with the rising expectations of millions of families who move from rural areas to the cities and from central cities to the suburbs in search of improved living conditions. Rising expectations apply as well to the public sector and create pressures for not only more public services but higher quality public services: better schools, better transportation, better hospitals.

An important test of the adequacy of government in metropolitan areas is its ability to meet the contemporary challenge of population growth, suburban development, and rising service demands. Local governments provide a broad range of services. Fifteen different functions account for more than 85 percent of direct general expenditures by local governments in the United States: Education, police and fire protection, transportation, water supply and sewage disposal, welfare, hospitals and medical care facilities, housing, urban renewal, libraries, parks and recreation, planning, health, refuse collection and disposal, and air pollution control.

The impact of metropolitan development extends to all these functions, and an adequate level of performance implies meeting increasing needs across this entire range of services. Although the overall performance of the governmental system is difficult to assess, a useful evaluation can be made by looking closely at the way in which rising demands for one particular service have been handled within metropolitan areas. The effects of new service demands upon a complex structure of local government are nowhere clearer than in the case of water supply and the closely associated function of sewage disposal. It is well within the technical and economic capacity of our metropolitan areas to develop dependable sources of pure water and to make reasonable provision for disposing of liquid wastes. Yet chronic water shortages, problems with the quality of drinking water, and polluted rivers and streams continue to plague cities and suburbs throughout the country. The inadequacy of strictly local approaches,

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