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Taking the Field: Should the partnership be recast? 

by Paul Meyer, League Executive Director

During the series of ice and snow storms this winter, here at the League offices there was conversation about how we were seeing both municipal and Department of Transportation trucks and workers clear the roads that allowed us to get to work. It was good example of the partnership between state and local government, how each plays a vital role in providing the services that North Carolinians need and expect. When it comes to roads, cities maintain a majority of road miles in their borders, 22,000 miles in all, while the state maintains around 70,000 miles of roadways. When it comes to public safety, those streets and roads are patrolled by municipal police officers, county-employed sheriff’s deputies and State Highway Patrol troopers. When it comes to public health, the people who live along those streets and roads are often served by municipal water, sanitary sewer and garbage-collection systems, along with a county-state coordinated system of health workers who focus on disease control and prevention.

In North Carolina, the levels of government have traditionally worked in partnership. As a Dillon’s Rule state, local government is a creature of state government. That’s why municipalities here are subject to the whims of the General Assembly. That partnership has recognized that as people live in closer proximity to one another that they require higher levels of service and differing types of services associated with the advantages and disadvantages of living in tighter spaces. Providing local services and setting the course within city boundaries are why municipalities exist. It is for those reasons that the General Assembly grants charters for the formation and operation of individual cities and towns. In a lot of other states, it doesn’t work quite that way. And as state policymakers here continue to examine and change the relationship between state and local government – including who pays for what and how – they would do well to consider how things operate in other states.

In Colorado, for instance, the citizens of each municipality can decide, by referendum, whether they wish to establish "home rule," and their state constitution provides specifics that give those home rule municipalities wide latitude in self government when it comes to "local and municipal matters." There are 96 home rule cities and towns in Colorado. Pennsylvania is another state where some municipalities enjoy home rule and others do not, with bigger cities like Philadelphia and Pittsburgh generally enjoying more autonomy from the state capital in Harrisburg. Home rule also reigns for some local governments in Indiana. That independence comes with price. Those states dole out government responsibilities very differently than in North Carolina, and some also have more extensive layers of local government.

If services are different, so too is taxing authority. Three Colorado cities impose consumption taxes. Most municipalities in Pennsylvania tax wages, a tax known as the Earned Income Tax, with rates as high as 3.98 percent in Philadelphia and around 2 percent in most municipalities. Local income taxes are also assessed on the net profits of businesses. In Indiana, all 92 counties have an individual income tax.

It is a world of rapid change. The question is whether North Carolina policymakers, and more importantly the state’s citizens, really want those kinds of changes here. If the rules of the partnership are going to be redrawn, then like in those other states, they are going to have to be redrawn completely. More responsibility has to be accompanied by more independence – fiscal and otherwise.