Commentary: Strategies for Inequity in an Era of Fiscal Stress

Published date01 March 2014
Date01 March 2014
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.
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
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
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

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