Op-Ed: On the Pitfalls of Federal Spending
In this piece, Charles Marohn argues that the relationship local governments have to federal funding is fundamentally unhealthy. He writes, "the way we have structured our governments, cities sit at the bottom of the food chain. Their bureaucracies are oriented up that chain, looking to the programs of state and federal governments for solutions. Instead, they need to be reoriented to the neighborhoods in their own communities."
Marohn cites several ways federal spending can give cities a short-term boost, but saddle them with long-term consequences.
- That the federal government "will pay to build things and then state and local governments are tasked with maintaining them."
- Federal infrastructure spending favors low-density, low-amenity suburbs and exurbs: areas with the highest costs and lowest returns.
- In a slow-growth or no-growth economy, federal spending should to support maintenance and efficiency rather than new construction.
- Federal projects put localities into a debt cycle. "Local governments generally rely on property and sales tax, but federal projects rarely add enough to the local tax base to extinguish the debt while sales tax revenue from a project, if there is any, ends with the project."