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State and Local Government Law
University of Texas Law School
Baker, Lynn A.

Perspectives on the Functions of Local Government
1.      Perspective from Politics
a.      John Stuart Mill- Considerations on Representative Government
                                                              i.      Leave policy to the federal government
                                                            ii.      Leave details and implementation to the local governments
                                                          iii.      Pay attention to externalities
b.      Tocqueville-  Democracy in America
                                                              i.      Lack of administrative centralization protects freedom
c.       Arendt- On Revolution
                                                              i.      Strength of republic comes from a collection of small republics
d.      Rosenblum- Membership and Morals
                                                              i.      Local governments frequently created and defended to insulate one set of local people or interests from the regulatory authority of and population of another local government
e.      Madison-Federalist #10
                                                              i.      Danger of faction
                                                            ii.      Extended republics tend to cure this danger
1.      As you extend the sphere, you make it less probable that that a majority of the whole will have a common motive to invade the rights of citizens
2.      Even if a common motive exists, it will be more difficult for all who feel it to discover their own strength and act in unison with each other
2.      The Perspective from Economics
a.      Tiebout- A Pure Theory of Local Expenditures
                                                              i.      Conclusion: The greater the number of communities/choices and the greater the variation among them, the closer the consumer will come to fully realizing his/her preference
1.      Better off with more choices
2.      The idea is that the consumer is trying to optimize
                                                            ii.      Criticisms
1.      Far-fetched assumptions
a.      prospective citizens do not have to work
b.      fully mobile population
c.       no externalities
d.      Full knowledge of taxes, services, laws, etc.
e.      There is an optimal community size that municipality will constantly move towards (equilibrium)
2.      Cannot assume that decision of where to live is all or nothing
a.      People may engage in partial exit where goods are available in private sector
                                                                                                                                      i.      Ex: send kids to private school, join private country club for swimming pool
3.      People may use voice
a.      Want to improve the conditions of available options where there are few choices of where to live
                                                                                                                                      i.      Ex: there are only two sushi restaurants in the areaà encourage improvement instead of not going back to one
b.      Attempt to use government to expand or contract panoply of costs and services
4.      Agency Problems
a.      Officials may not do exactly what the citizens want
b.      Ex: interest group comes in and gets their way on a certain issue despite the overall desires of residents
                                                          iii.      Conceptualization
1.      It is much easier for people to choose among cities than it is for them to choose between states and countries
b.      Logan and Molotch- Urban Fortunes  (Critique of Tiebout)
                                                              i.      Tiebout fails to weigh intangibles—neighborhood is more than service provider
1.      Support network
2.      Personal identity (think Westlake)
3.      Ethnic group (once much more prominent—think Bronx)
4.      Agglomeration of factors
a.      Ex: ethnic neighborhoodà common language, more favorable church/restaurant etc. choices
3.      Role of Government (Government provides:)
a.      Forum for discourse
b.      Provision of Goods and services
4.      Theories of Government
a.      Civic Republican
                                                              i.      Local governments should be Focal Point for discourse about politics
                                                            ii.      Only area where individuals can have a meaningful role
b.      Public Choice
                                                              i.      Elected officials want to be reelected and, in order to do so, they must give their constituents what they want
                                                            ii.      Represents people coming together and aggregating their preferences for goods and services
                                                          iii.      Possible conceptions
1.      Outcome of voting rule
a.      Whatever majority wants
                                                                                                                                      i.      But this may not always be in the public interest
2.      Outcome of decision-making process
a.      Process crafted to ensure access, deliberation and consideration of alternatives
3.      Platonic
a.      Focus on decision-makers and vote for the one that is most wise and has the best experience
                                                           iv.      Problems
1.      We do not always want majority will enacted—officials need to filter it
2.      Voters =/=constituents
5.      Problems that government is uniquely capable of solving
a.      Coordination problems
                                                              i.      Ex: prisoner’s dilemma—uncertainty as to what other party will do
                                                            ii.      Government can set standards, prevent holdouts and remove the costs of uncertainty
b.      Free rider problems (chicken game)
                                                              i.      Government can organize and regulate so that nobody is a free rider
1.      Public goods are non-rival: consumption by one person does not affect the ability of others to enjoy
2.      Public goods have enormous positive externalities
                                                            ii.      Ex: lighthouse—everyone benefits, but who would pay for it?
c.       Failure to internalize negative externalities
                                                              i.      Tragedy of the commons
                                                            ii.      Ex: pollution
                                                          iii.      Government can force these costs to be internalized
d.      Information problems
                                                              i.      Government can provide information so that we make rational decisions
                                                            ii.      “save us from ourselves”
6.      Criticisms of government
a.      Government is itself a public good
                                                              i.      Non-rival
                                                            ii.      Non-excludable
b.      Do not always need intervention to solve collective action problems
c.       Officials might misunderstand or ignore voter preferences
d.      Preferences might not be appropriate
e.      Special interests may converge to pass legislation not in the public interest where benefits are concentrated and costs are dispersed
f.        Voluntary cooperation is possible:
                                                              i.      When defection from cooperation can be monitored
                                                            ii.      When actors value their reputations
                                                          iii.      When the norm is that cooperation enhances personal reputation
7.      What Level of government should be providing goods and services?
a.      Issues
                                                              i.      Obtaining economies of scale
                                                            ii.      finding median voter
                                                          iii.      finding better qualified representatives
                                                           iv.      the need for uniformity of laws in some areas
1.      ex: environmental issues
                                                             v.      the need for one voice in some areas
1.      ex: foreign affairs

   “The congress shall have power. . . to regulate commerce. . . among the several States”
c.       Spending Power (Art. I, §8, cl.1)
                                                              i.      “The Congress shall have power. . .to pay the Debts and provide for the common defense and general welfare of the United States”
2.      Tenth Amendment Protection of States
a.      Old Rule: Federal government could not interfere with integral governmental functions, traditional governmental functions and other functions essential to the existence of the states—10th amendment has real bite (Nat. League of Cities)
                                                              i.      Four Pronged Test
1.      Is the fed. regulation seeking to regulate the “states as states?”
2.      Does the federal regulation address matters that are indisputably attributes of state sovereignty?
3.      Does federal regulation directly impair the states’ ability to structure integral operations in areas of traditional governmental function?
4.      Does the nature of the federal interest being asserted justify state submission?
                                                            ii.      National League of Cities- Court invalidated congressional legislation that applied the minimum wage and maximum hours provisions of the Fair Labor Standards Act to employees of states and their political subdivisions
1.      Displaced the States’ freedom to structure integral operations in an area of traditional governmental functions
b.      RULE: A rule of state immunity that turns on a judicial appraisal of whether a particular governmental function is “integral” or “traditional” is unsound in principle and unworkable in fact (Garcia v. SAMTA)
                                                              i.      Court cannot distinguish among these functions, so it won’t try—would be making policy choices
                                                            ii.      Sovereign interests of States better protected by structure of government than judicial limitations on federal power
1.      Ex: the Senate
                                                          iii.      States also protected by textual limits on fed. Govt. enumerated power
1.      Ex: commerce clause has limits
                                                           iv.      Garcia- Congress had the authority under the Commerce Clause of the United States Constitution to apply the Fair Labor Standards Act to a municipal mass transit system operated by a governmental entity
1.      Dissent: States’ role is matter of constitutional law, not legislative grace
a.      Senators are part of federal government once elected
b.      Federal officials are being made judges of the limits of their own power
c.       Federal administrative officials are not elected and do not know about local issues
                                                             v.      Critiques
1.      Punting on difficult line- drawing would not be tolerated in other areas of law
a.      Though this is an abstract area and there is a stigma attached to States’ rights, the court’s job is line-drawing
2.      Issue is horizontal, not vertical
a.      States using federal government to gang up on other states
b.      Problem is not that State and federal governments are naturally at odds
3.      Senate is actually cause of problems
a.      Gives disproportionate power to small states
4.      Political parties cannot be relied on to protect state sovereignty
a.      Not in Constitution