Local governments in the United States spend trillions of dollars each year delivering essential services and infrastructure, with enormous implications for our economy and quality of life. Chris Berry and Justin Marlowe examine the links between municipal governance structures and fiscal outcomes, revealing the state of municipal finances today.
Local government is big business. According to the most recent United States Census estimates, there are 90,837 units of local government. This includes 19,491 municipalities, 16,214 townships, 3,031 counties, 12,546 independent school districts, and 39,555 special districts. In fiscal year 2021, they spent $2.3 trillion, an amount roughly equal to 10% of U.S. GDP.
These governments deliver a vast portfolio of services and public infrastructure; everything from police and fire protection, public education, water and sewer systems, golf courses, ports, professional sports facilities, cemeteries, and mosquito abatement, just to name a few.
How our local communities are governed has enormous implications for our economy and quality of life. In this article, we discuss the structure of municipal governance and the links between structure and fiscal outcomes.
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BY CHRISTOPHER BERRY and JUSTIN MARLOWE
April 29, 2024