Pull
Down Dillon's Rule
In
a dynamic economy, communities need greater
flexibility in spending public revenue to provide
citizens the public services they need. It's time
to scrap the Dillon Rule.
To
talk about silos when statues of a tyrant are
toppling and a war is underway inevitably leads to
thoughts about missiles. But for a Northern
Virginia company named SiloSmashers, a silo is an outdated,
bureaucratic way of organizing and responding to
problems. Breaking down such barriers, the firm
suggests to public and private sector executives
alike, is a critical step toward managing needed
change and getting more done with less. With
public needs changing faster than public policy,
the whole silo mentality has to go first.
But
there is another problem that acts as a huge ball
and chain on Virginia
governments specifically. The so-called Dillon
rule, outlined by an Iowa
justice beginning in 1865, continues to bind the
Commonwealth's ability to respond to the priority
needs of its localities and regions. It confuses
one-size-fits-all solutions with equity. It
presumes state power and prerogative are more
important than local insight, capability and
responsiveness. In ignoring the moves of virtually
every other state to some variation of home rule,
Dillon's rule in Virginia
stands
as the ultimate silo.
So
here is the call to action: Pull down the statutes
of Justice John Forest Dillon. Let the regime
change begin!
Why?
Start with budget silos, also referred to as
buckets or pots of money at the state level. These
buckets often have specific revenue streams
coupled with strict rules on dedicated spending,
such as the state tax at the pump on gasoline
dedicated to highway maintenance and construction
or state lottery proceeds dedicated to public
education. Adding to the strictures on revenue use
are complex, sometimes indecipherable formulas
that distribute general fund revenues to regions
and localities, such as the sacred "composite
index" that controls state expenditures for
public education despite gross inequities.
Even
when times are good, the lack of flexibility to
move revenues from one spending bucket to another
limits the ability of officials and managers at
every level to meet real needs that change
continuously in a dynamic economy. When times are
bad, the lack of flexibility means no region or
community possibly can get what it really needs.
In
the 2000 General Assembly Session, for example,
the Commonwealth didn't respond to either the
extraordinarily difficult times in Southside
brought on by a sudden explosion in unemployment
or to booming infrastructure needs overwhelming
fast-growing and rich Loudoun
County.
Increased or extended unemployment benefits for
Southside, the one-size-fits-all rationale goes,
just wouldn't be fair for others in
Virginia.
Nor would dedicating a small percentage of the
increase in state income tax collections from
Loudoun to new school construction in Loudoun.
Government otherwise worked well for average
citizens in average communities with average needs
and average expectations, i.e. for no one.
Now
consider what could happen if a few buckets could
be kicked over and funds formerly dedicated could
be used for what a community or region might
decide it needs the most. The Department of
Transportation could respond to local needs by
deciding to reconstruct all crumbling bridges in a
region before constructing new highway segments.
The Department of Education might allow tradeoffs
between school construction funds and teacher
salary adjustments by administering priority funds
over and above normal formula restrictions.
Southside
might not have to fight tooth and nail for every
last state cent it is due under various funding
buckets even while it knows the dollars available
in each category are only a small percentage of
what are needed and not enough to finish any one
priority project. Southside, instead, might join
with Southwest and decide the upgrade to Route 58
is the single most important priority for its
region and, therefore, trade a year's worth of
increases in school construction funds in order to
get more transportation dollars. Completing a
priority transportation project faster would be
less expensive and deliver promised economic
development returns sooner. The next year,
Southside might opt for more school construction
funds and smaller road maintenance.
Or
Loudoun County could decide that more state
support for school construction was worth more
than a one-year increase in its transportation
allotment and could make the trade, thereby
freeing up highway money for other regions. And
maybe Northern Virginia could be credited with its
lower per capita unemployment benefit costs, then
send those credits to extend benefits available in
Southside in return for a kicker in its public education funds for English as a
second language programs.
With
state government controlling everything from pay
raises to coyote control to job training to
tourism advertising to police aid, greater
flexibility would help localities and regions set
and address real priorities faster. Not
incidentally, more power to localities would cut
down on the time the General Assembly devotes each
year to concerns properly anchored in local
governments. If delegates and senators really want
to control counties, cities and towns, after all,
they can run for local office in November.
So
why can't the Commonwealth consider turning
regions and communities loose to help set and fund
their unique priorities? As has been pointed out
by experts, such as Jesse J. Richardson, Jr. at
Virginia Tech's Institute for Metropolitan
Research and Clay Wirt in Fairfax County, it all
goes back to the dim view Justice John Forest
Dillon took of municipal governments almost 150
years ago.
"Those
best fitted by their intelligence, business
experience, capacity and moral character"
usually do not hold local office, Justice Dillon
suggested, and conduct of municipal affairs
generally was "unwise and extravagant."
So in Clark
v. City of Des Moines in 1865, Dillon ruled
that local governments were creations of the state
and, therefore, had only those powers granted by
the state. That state governments might discover
their own ways of being unresponsive and
ineffective apparently did not occur to the
justice, which leads one to wonder if Dillon as a
boy might have missed the fable, "The Dog in
the Manger.”
Given
that states began cracking Dillon's rule and
moving to some form of home rule as early as 1875,
it also is baffling why Virginia is the last state
to hold onto such a strict and unyielding
interpretation of this hoary philosophy of
inter-government relations. An independent
Commission on Constitutional Revision urged the
modification of Dillon's rule in the Commonwealth
in 1969 without positive result.
But now always is
a good time to give up a bad habit. Start by
mollifying the worst effects of Dillon's rule by
statute in 2004 and move steadily toward a more
modern home rule system in the years ahead. Local governments with the power and
revenues to solve local problems will give both
General Assembly and governor the time to
concentrate on solutions that elude them on real
statewide problems.
--
April
14, 2003
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