Municipal Home Rule and the Processes of Intrastate Fiscal Competition

Abstract

This paper gives a brief, general overview of the doctrine of municipal home rule and its relationship to fiscal decisionmaking within state governments. The basic claim is that state and local governments compete against one another for fiscal control and authority. States naturally have a substantial leg up in this fiscal competition; moreover, state government manages local fiscal authority through an admixture of constraints, incentives, and resources. On the other hand, the developing doctrine of municipal home rule provides an unsteady shield from state control. Of course, the viability of this sheild rests on interpretive judgments of central decisionmakers, often state judges. While this survey offers no comprehensive theory of how to mediate the tension between state and local governments, it highlights the way in which state constitutional law can accomplish the aim of regulating the processes of intrastate fiscal competition. More careful empirical analysis is essential to unpack the particular contours of this competition for control; and more nuanced prescriptive analysis is necessary to establish rules, procedures, and institutions with which to improve state and local fiscal decisionmaking.