Mobilizing Resources for Public Services: Financing Urban Governments

ABSTRACT:

This article examines potential sources of revenue needed to finance urban services. In formulations for resolving the US urban crisis, answers are unclear and several policy guidelines are suggested. First, political candidates must assess reasonably the cost of public services and avoid blanket assurances of no new or increased taxes. Second, urban local governments must have access to the fiscal resources of the full urban area for which they have been assigned responsibility for providing public services. Third, urban governments must coordinate and cooperate: Fiscal mercantilism is not productive public policy. Fourth, urban local governments must give greater priority to infrastructure maintenance and development in their financial plans. Fifth, urban local governments must improve property tax structure and administration with appropriate assistance from state governments. Finally, urban local governments must make better use of charge financing and must expand use of broad-based sales and income taxes in cooperation with their states. The authors conclude that urban local governments need to look for resources themselves; prospects for major intergovernment assistance, especially federal, are dim.