Koelemay's Kosmos

Doug Koelemay



 

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 But for a Northern Virginia company named SiloSmashers, a silo is an outdated, bureaucratic way of organizing and responding to problems.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

 

              

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

More about Doug Koelemay

 

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