Commentary: Strategies for Inequity in an Era of Fiscal Stress

• DOI: http://doi.org/10.1111/puar.12206
• Published date: 01 March 2014
• Date: 01 March 2014

Commentary

Mark Pisano is senior fellow in the

Price School of Policy at the University

of Southern California and past

executive director of the Southern California

Association of Governments.

E-mail: mpisano@sppd.usc.edu

258 Public Administration Review • March | April 2014

Public Administration Review,

Vol. 74, Iss. 2, pp. 258–259. © 2014 by

The American Society for Public Administration.

DOI: 10.1111/puar.12206.

Mark Pisano

University of Southern California

Income inequality is a rapidly emerging issue,

especially challenging in the context of the long-

term f‌i scal stress that governments at all levels

will continue to face for decades. “Separate, Unequal,

and Ignored? Interjurisdictional Competition

and the Budgetary Choices of Poor and Af‌f‌l uent

Municipalities” by Benedict Jimenez provides infor-

mation and analysis that will help develop responsive

strategies.

 e U.S. Government Accountability Of‌f‌i ce’s state

and local trend reports (GAO 2013b) project net

operating def‌i cits for states and local governments

over the next three decades. Fiscal pressures and

projected def‌i cits will more than double in this period.

Demographic trends—the primary forces contribut-

ing to the rising expenditure patterns causing these

def‌i cits—will also cause declines in the growth of

incomes, expenditures, and taxes paid (Pisano 2013),

adding signif‌i cantly to these def‌i cit projections.  is

stress, together with long-term federal budgetary stress

projected by both the Government Accountability

Of‌f‌i ce (2013a) and the Congressional Budget Of‌f‌i ce

(2013), will likely limit the main tool for address-

ing inequities—reallocation by higher levels of

government—and render competition at the local

level even more dif‌f‌i cult to achieve.

Jimenez tests whether low-income consumer sov-

ereignty improves in a fragmented regional envi-

ronment. Although his analysis does not answer

conclusively whether the competition is “separate,

unequal, or ignored,” he does conclude that less

service is provided in poorer cities. His framework and

insights of‌f er invaluable elements of a strategy that

could help respond to this challenge. His modif‌i cation

of Peterson’s City-Limits model generates many inter-

esting and important insights and conclusions. A few

f‌i ndings relevant to developing a strategic response for

local governments are as follows:

•  e clear majority (86 percent) of the 9,007

jurisdictions in metropolitan areas—the

test area—have a mix of af‌f‌l uent and poor

populations: 11 percent are higher income

and 4 percent are low income. For a majority

of the population in the metropolitan regions,

leadership has an opportunity to craft solutions

to help address this issue.1

• At $57 per $1,000 of income, poor munici-

palities have a greater reliance on user charges

and fees, compared to $48 for mixed and $27

for

af‌f‌l uent communities. While ref‌l ecting a

regressive burden, these f‌i gures demonstrate at

least some support for needed services within

less af‌f‌l uent jurisdictions. Poor communities, on

average, spend a higher percentage of income

than other communities for services, including

redistributive services that help lower-income

populations. As interjurisdictional competition

increases, these services are reduced. Finally, poor

communities rely more heavily on redistribution

from higher levels of government and accumu-

late higher levels of debt.

• Af‌f‌l uent communities of‌f er very few redistribu-

tive services and generally respond to the needs

of their constituents.

• Competitiveness of the economy is more related

to the competitiveness of the region than to the

individual municipality.2

 e author has begun a topology mapping the

potential for individuals of various incomes in vari-

ous jurisdictions to continue to grow their regions,

cope with f‌i scal stress, and deal with inequality in an

environment of f‌i scal scarcity.  e following are some

suggestions to assist the author in further developing

this important piece of work.

Fiscal sustainability case studies of local governments

in Southern California observed that jurisdictions that

developed partnerships with other entities and other

sectors were best able to balance their budgets and

meet the service needs of their constituents (see the

article in McGrath 2012).3 Many of these partnerships

were nonprof‌i ts that brought additional resources

Strategies for Inequity in an Era of Fiscal Stress