Local Government Autonomy and State Reliance on Special District Governments: A Reassessment

Abstract

The notion that local government autonomy has important implications for a state’s local government structure is fast approaching conventional wisdom. Negative binomial regression is used to analyze the link between the administrative, fiscal, functional, and structural autonomy permitted to municipal and county governments and the number of special districts in each state over the 1992-2002 period. This pooled analysis reveals that this relationship to befar more limited than previously thought. This study challenges the findings of previous studies showing that limitations on local autonomy strongly encourage a splintering of local government authority due to the creation of numerous special districts. Tax and expenditure limitations (TELs) were the only restrictions that were consistently related to a greater reliance on special district governments, and only when both municipal and county governments were both strongly restricted. For the most part, state reliance on special district governments was unaffected by the extent of restrictions placed on local general-purpose governments with regard to debt and permitted functions.