By Neil Kleiman

City-State Partnerships That Promote Economic Recovery

Most of the work of government that Americans see on a daily basis is the work of local government—from police on patrol to sanitation services to the maintenance of streets and highways. Results of a 2014 Gallup survey indicate that while many Americans report skepticism of federal and state government, most trust their local government – the government closest to them and the one that they know best.

While residents rely most heavily on local government services to meet their needs, many local government functions are heavily influenced by policies and programs at the state level. Most vestiges of true local autonomy below the state level have been revoked centuries ago. The federal government—through law and funding—also exerts some power over local governments, but in those areas most important to localities, the state government is the primary authority and the principal funding source.

Simply put, cities are subjects of their states. Therefore, their success or failure is often heavily dependent on their ability to establish a strong intergovernmental partnership.

States—far more than the federal government—have authority over city finances, policy and local reform efforts. As a result, the level of engagement between cities and states can have a significant impact on cities’ economic progress. Despite this potential, a 2015 survey of mayors conducted by the Boston University Institute on Cities found that states are the lowest ranked partner that cities turn to for assistance.

State governments can help cities in America thrive, innovate and for the many still suffering in the economic doldrums, turn around. But absent state partnership, the promise of cities can go unrealized with efforts at recovery impaired.

The Network’s review of city-state partnerships has identified five strategies through which states can support the economic progress of cities:

  • Build Local Capacity: The newly announced Massachusetts State National Resource Network is an example of how state government can tailor external and state government expertise to address core local capacity issues.
  • Prevent Fiscal Distress: Pennsylvania’s Act 47 and the North Carolina Local Government Commission program have both been successful state efforts to keep even the most economically challenged cities in the budget black and out of bankruptcy court.
  • Target Funding to Need: Without high performing schools, adequate housing and safe streets, it is difficult for economically challenged cities to attract new residents or business. State funding formulas that target need—such as recent reforms in education financing in California and public safety reform in Oregon—provide real benefits to economically challenged cities.
  • Invest in Revitalization: State funding that targets strategic economic development investments—such as Vision Iowa—and state laws that encourage community redevelopment—such as Michigan’s Land Bank
  • Enabling Legislation—show the critical role that state government can play in revitalization.
  • Promote Regional Cooperation: Both Indiana and Ohio—among other states— have encouraged local governments to coordinate efforts and share services as a way to increase efficiency, save costs and improve effectiveness.

For more information on helping your state move forward, please email and check out our report, Accelerating Cities: Why States are the Most Important Partners for Economically Challenged Cities.