This post is part of a larger series.
A Unified Regional Government
The Problem in Brief
One of the core issues I discussed that causes Philadelphia’s poverty and inequality is the intense fragmentation of local governments (see this post for much more). In total, there are 377 local governments, 11 counties, and four states within the greater Philadelphia area. This is not even counting the numerous school districts in the region. The result is that wealthier residents are able to, and even have an incentive to self-segregate. They can effectively enjoy the economic benefits of the region, while living within separate tax and service enclaves. Furthermore, this fragmentation makes regional planning incredibly difficult, since each individual government is creating its own separate development plans. Finally, the fragmentation of governments creates intense competition, pitting each locality against its neighbors to attract companies and residents. This means that each locality has an incentive to offer the lowest taxes possible, the lowest wages for companies, and even tax incentives and tax breaks. This creates a “race to the bottom” to offer the most attractive package, ultimately harming the whole region.
So, what is the solution? I take lecturer, think-tanker, and former New Mexico legislator and Albuquerque mayor David Rusk’s and his colleagues’ view: We need to create some form of regional government or administrative layer within the greater Philadelphia area that establishes tax sharing that addresses resource disparities, coordinated regional planning for land use and transportation, and coordinated policy on economic development to avoid the “race to the bottom.” Unfortunately, this is probably the toughest issue in the region to address, since the government at every level favors federalization, fragmentation, and local powers. This seems to be a deeply engrained feature of American political culture and ideology—that each locality is largely independent of a central government.
In his book Cities Without Suburbs (I have the fourth edition), David Rusk identifies many of the same issues I describe with fragmented regional governments. He takes it several steps further. Rusk studied the census data and laws of almost every metro area in the US from 1950 through 2010, and he has thoroughly documented the finding that “elastic” cities are doing better, while “inelastic” cities are suffering. Elastic cities, for various reasons, are more easily able to annex or merge with surrounding areas or create regional agreements. As a result, they have greater cohesion with their suburbs, far lower income disparities between city and suburbs, far lower levels of racial segregation, and far higher levels of resilience to economic shocks and global trends. Inelastic cities, on the other hand, are highly economically and racially segregated, and they fare poorly when faced with new challenges such as global economic changes that require coordinated regional responses. Most inelastic cities are in the Northeast and Midwest—older, post-industrial cities with long histories of segregation, high population density, and that are completely hemmed in by long-established incorporated regions. Most elastic cities are the newer cities of the Southwest and West Coast.
Rusk is considered one of the leaders of the so-called “regionalism” movement in the US, which generally advocates for unifying metro area policies to create more elastic cities. Since Rusk has so thoroughly studied this problem, I looked to his work for possible answers. First, he outlines three essential regional policies for any metro area to be elastic (see pages 123-124):
- Inclusionary zoning and other mixed-income housing strategies;
- Land use and transportation planning; and
- Tax-base sharing.
I wholeheartedly agree with this criteria. I want to take the fiscal aspect one step further to include not just tax-base sharing, but also general fiscal policy to prevent the “race to the bottom.”
However, Rusk’s solutions, and all others I have read about, do not go far enough for a region such as Philadelphia. He emphasizes city-county consolidation, action from state legislatures to force cooperation or create a framework for cooperation, action from state legislatures to increase annexation and merger powers of central cities, and limiting the creation of new municipalities or incorporated regions.
These are all strong proposals for many of the metro areas in America. However, Philadelphia faces some unique problems. The city and county already consolidated in the mid-1800s, and the greater Philadelphia area is now far larger than a single county. Philadelphia, as an older city, is also completely surrounded by incorporated territories that can and would resist annexation or mergers. Next, state law makes annexations and mergers incredibly difficult, and it is so deeply entrenched that it would be incredibly difficult to change this. Finally, the greater Philadelphia area encompasses four states—not one or even two states, as is assumed with most metro areas in the country. The situation could only be worse if Philadelphia bordered other countries.
However, this doesn’t mean we shouldn’t try to remedy this issue. There are methods that I have found, they’re just politically and practically difficult to implement. I will present what I’ve found, fully recognizing that this is not an easy, one-and-done solution. Rather, I hope to open up more dialogue and awareness as to how we might tackle this complex problem. Here are the possible options:
Option 1: Merge Local Governments Via Existing Referenda Policies
I researched the constitutions and laws in each of the four states within the Philadelphia Metropolitan Statistical Area (MSA). Recall that the MSA is designated by the federal government for census purposes based on commuter and economic data. It is a region that is economically interdependent, centered upon a central, or “principal” city. In short, it’s what most of us would call a greater city area. None of the four states in Philadelphia’s MSA allow for one region to simply absorb other regions, even within the same county or within the same state. One government cannot merge with, annex, or otherwise dissolve other governments without meeting an extensive series of criteria. Always, one of these criteria involves passing a referendum among each locality that would be impacted. Additionally, none of the governments have a legal framework in place to merge local governments across state boundaries. Here’s a brief summary of each state’s laws and constitution on the matter:
- The constitution says that the state cannot regulate the affairs of local communities, change any borders, or create any new governments. (source)
- State law allows for mergers, even across county lines, but ultimately requires approval by the electorate of each affected area via referendum. (source)
- State law prohibits municipalities from changing boundaries. (source)
- State law allows municipalities within the same county to merge via referendum. (source)
- State law allows for annexation in general, provided approval by voters via referendum. (source)
- Another state law allows for annexation, provided approval by voters via referendum. (source)
- State law requires that annexations by cities of the first class (i.e. Philadelphia) be approved by voters of each area via referendum. (source)
- The state constitution has nothing to say on boundaries, annexation, or sharing of resources or taxes. (source)
- State law allows for annexations and mergers, but requires referenda from each affected region. (source)
- The state constitution says that the state cannot enact any laws that impact a specific municipality or region; it can only implement laws that affect specified classes of municipalities. (source)
- State law allows for annexation by referendum of the affected regions (source), but does not allow for annexation of other municipalities. (source)
- Two municipalities can merge (source), but this requires a charter amendment process, which requires a referendum. (source)
- The constitution has nothing to say on boundaries, annexation, or sharing of resources or taxes. (source)
- Municipalities can annex territory, but only given many restrictions, including referenda from affected areas. (source)
This leaves the following scenario for this strategy. First, residents of the Pennsylvania part of the Philadelphia MSA would have to initiate the referendum process to merge. Each region would eventually have to agree to this by a simple majority of voters. Then, once the Pennsylvania portion is merged, this could create the political incentive for the New Jersey portion of the Philadelphia MSA to attempt to merge. It could first merge within itself by similar referendum processes, and then attempt to merge with the Pennsylvania portion. Then, once these two regions are merged, there could be enough political and economic incentive for the Delaware regions to join, and then finally the Maryland regions.
Obviously, this is a bit ridiculous. Just imagine the impracticality of getting 377 local governments and even more school districts to agree to unify. Each of these governments has its own interests, and probably many of them exist specifically to avoid being part of a larger region. There would be intense pushback, even within one state. Even further, can you imagine any state willingly giving up territory to a new government region? This would effectively be like forming a new state, and asking several states to give up territory to form it. This would create a problem of which state the new MSA government would be part of, which would not be a very friendly or fruitful debate.
I find this to be one of the least likely options for these reasons. I strongly recommend against attempting this. The odds are so heavily stacked against this kind of strategy that I think the only realistic way to achieve an MSA administrative region is for a government higher than all of them to help.
Option 2: Change the Rules So States Can Compel Cooperation
Since it is so difficult to get each local government to agree, and each state prohibits the state government from forcing them to agree, we could attempt to change the rules of the game at the state level. This would mean amending existing laws and constitutions. In Pennsylvania, for instance, the constitution says that the state cannot regulate the affairs of local communities, change any borders, or create any new governments. I also found seven separate laws establishing criteria for various types of mergers, and all of them include passing a referendum in each affected region. New Jersey, Delaware, and Maryland don’t have similar prohibitions in their constitutions, but they do have similar laws establishing criteria for mergers, including referenda.
This would require a coordinated effort to pass several acts of legislature from all four states, in addition to a constitutional amendment in Pennsylvania, which is already very difficult to achieve. For these reasons, I do not recommend this option.
Option 3: Entice the Existing Local Governments to Join and MSA Administrative Layer
Since merging the boundaries and governments within the MSA is so difficult, and changing the rules for mergers is so difficult, perhaps a better alternative is to leave those boundaries and governments alone, but to create an additional administrative layer on top of them. This would be a sort of voluntary government cooperation region, a bit like the European Union or other international economic and governance zones.
The Pennsylvania constitution and Pennsylvania law explicitly allow for intergovernmental cooperation of all forms, even across state boundaries. That is great news. Maryland law allows for intergovernmental councils to be formed, even across state boundaries. It also allows for intergovernmental cooperation and resource sharing, though it doesn’t specify if this includes governments in other states. New Jersey has a similar law allowing for intergovernmental cooperation and sharing, but it also doesn’t specify if this is allowed with governments in other states. Delaware law and the Delaware constitution have nothing to say on the matter, so it is not prohibited, but it is also not explicitly allowed. Here is a summary of each state:
- The constitution explicitly allows for intergovernmental cooperation of all kinds, even across state borders, provided that the localities initiate this and agree upon it. (source)
- State law allows for intergovernmental cooperation. (source)
- State law allows municipalities and counties to cooperate with others in any way, but it’s unclear if this is only in NJ. (source)
- State law creates a pilot to create shared services between certain local governments. (source)
- State law establishes the NJ Intergovernmental Relations Commission. (source)
- State law authorizes local governments to establish a regional council for all governmental purposes, including with governments in other states. source
- State law allows local governments to cooperate and share in any way. (source 1) (source 2)
- The constitution and law have nothing to say on the matter of intergovernmental or regional cooperation.
This option is at least not strictly prohibited, and it is even explicitly allowed in several ways within three of the four states. Additionally, there are already interstate and intergovernmental agreements for certain things, like with regional transportation authorities or regional watershed protection authorities. It is not impossible that the regions could all agree to create this extra administrative layer.
However, this would have to be a voluntary organization, and the rules of this organization would have to be agreed upon by each participant. There would have to a delicate balance between maintaining the autonomy of each member government, while still having enough of a policy impact to create the necessary cooperation. What would the incentives or disincentives look like for such an organization? How would these be created in such a way that every region would want to join, while not watering down the strength of the regulations and policies? This is where I see the greatest issue.
Still, since this option is far more politically and practically feasible, I think this is one of the better options available. This is worth exploring, and perhaps an initial region could be created that is built upon with further layers of agreements to strengthen its policies. Regardless, this would require many years of dedicated negotiation and campaigning.
Option 4: The Federal Government Forces Cooperation
As the only government higher than the numerous local governments and states, the federal government is the only one that would feasibly have the power to compel cooperation. And, since each locality has little incentive to cooperate without outside coercion, this would solve the problems of getting each locality to agree upon terms. The federal government cannot change the boundaries of states to create a sort of city-state that encompasses the greater Philadelphia area, according to the Constitution. However, there is nothing that says it cannot create a separate administrative layer that functions like a government, while keeping each locality as a member of the administrative layer. Under this strategy, the federal government would pass a law requiring the localities within the MSA to create and join an administrative region.
However, this is probably the least popular and least likely option for several reasons. For one, this is likely unconstitutional. The federal Constitution specifically leaves all powers to the states that are not enumerated, meaning that states are free to decide their local policies and agreements. Even if we could get the federal government to pass this law, which is already very politically difficult, regions that are unhappy with the law would likely challenge this in court and win. Creating this administrative layer would also likely violate several state laws just in Pennsylvania, let alone the other three states. This opens up more legal challenges. And, even if unhappy regions didn’t challenge the law in court or were unsuccessful in court, they would be very unwilling to implement this policy. Reluctant regions would drag their feet at every step of the way.
Because of these reasons, I do not recommend this option.
Option 5: The Federal Government Creates the Possibility for Cooperation
This strategy is similar to option 4, but it removes the element of coercion. Instead of forcing the MSA to join this administrative layer, this federal law would simply create the legal framework for the MSA to voluntarily create an administrative layer like the one I initially described. There are many ways to implement this. For instance, the law could stipulate that each county or county equivalent within an MSA can agree to join the administrative region via a referendum of local voters. By creating a much simpler, streamlined method with clear roles, rights, and responsibilities, the federal government can help facilitate the creation of an MSA administrative layer, while avoiding having to force the region to cooperate.
However, this may still be unconstitutional. This could be interpreted as the federal government interfering with states through legislation, which the Constitution does not allow. Even if this is deemed constitutional, and Congress and the president actually pass such a law, then there is still the hurdle of getting each region to voluntarily join to MSA administrative layer.
Despite its difficulties, this is one of the more feasible proposals available. I do strongly recommend developing this idea and attempting this.
These are all of the possible options I have found. It is still possible that there are other creative solutions, which is why public dialogue on this issue in order to get as many people churning out ideas as possible is essential. Still, among the solutions I have found, option 5 seems to be the most feasible. Therefore, the best strategy is to push for a federal law, which means pressuring Congress members and the president, and electing Congress members and a president who would support this. That is no easy feat, but it may be our best option.
As long as the Philadelphia area has such thoroughly fragmented regional governments, it will be incredibly difficult to enact fiscal reforms to mitigate poverty and inequality. Any change in tax rates, increases to the minimum wage, or new regulations will be potentially self-harming as long as there are literally hundreds of neighboring regions that then have an incentive to have a lower tax rate, a lower minimum wage, and no regulations.
This doesn’t mean that we shouldn’t continue to try to reform these fiscal issues. It could take a decade or more to create this MSA administrative layer, even assuming all goes well. We cannot afford to wait any more to implement needed reforms. We should still push to raise the minimum wage, reform taxes, and so on—we just have to walk on eggshells as we do it. Any policy changes must be carefully and incrementally implemented so that Philadelphia does not shoot itself in the foot by harming its local economy.
Therefore, let’s take a two-pronged approach. Let’s push for immediate fiscal and programmatic reforms that we can enact with the current system, while pushing for long-term system change.