Local Government's Deceptive Charm

Nothing is more central to the current effort to reform government than the concept of devolution. Devolving federal functions down to the state and local level has great appeal. Any suburbanite who has voted on a school district budget knows the impact of linking the level of taxes to the quality of government services. The charm of devolution is that it promises to localize practically all government services and give people the chance to directly fund them--or not.

The only problem with this romantic notion of power to the people is that we also know how awful local government can be. The only thing worse than the U.S. Postal Service is the local motor vehicles department. Here are some facts: From 1970 to 1992, the number of civilian federal employees grew not one bit and even fell sharply as a percentage of the population. The number of state employees, however, soared from 2.8 million to 4.6 million, and the number ef local public workers jumped to 11.1 million. That's a grand total of 15.7 million. Today, one out of eight people working in this country works for the government, the vast majority at the state and local level.

In themselves, these numbers show there is no efficiency magic in devolution. In fact, state and local governments have often proved to be more easily seduced by special interests than the federal government. State governments are notoriously open to persuasion. Look at the savings and loan crisis. States deregulated S&Ls, and when the smoke cleared, state-chartered S&Ls were responsible for most of the funds lost. S&L officials were well known around state capitals for their campaign contributions to legislators. We know the federal regulators were asleep. State regulators were comatose.

The sad truth is that local government is often the worst government. There are too many overlapping jurisdictions with taxing power. In one locality in New York's Nassau County, people pay taxes to 17 government agencies.

The good news is that a few municipalities are changing. New York City, believe it or not, can get a person in and out of one of its satellite motor vehicle offices in 15 minutes. Devolution makes sense because it brings government closer to the people. But until state and local governments reinvent themselves, let's not confuse devolution with efficiency.