More neighbourly government

 City of Milwaukee 

     Until a few years ago, travellers driving south down Interstate 81 from New York state would be welcomed to Pennsylvania with a sign reading "America starts here." The sign has gone now, but the mood, if anything, is even more emphatic. America's smaller governments are flexing their muscles; and devolution, which used to mean the shifting of power to the states, now increasingly means the shifting of power to cities and townships too. 

      Throughout the 1990s, the lower and more local levels of government have won increasing importance, for several reasons. Republicans, who have been in the ideological ascendant, have promoted the idea of government that is smaller, more efficient and closer to the people. The Supreme Court has ruled increasingly in favour of states' rights, and the passage of time has blunted the suspicion that those rights are a code-word for bigotry and resistance to change. It helps that education and crime-fighting, which mostly belong to the states and cities, have became national obsessions. And some tasks have been seized by states because the federal government has been only too keen to get rid of them. States like Wisconsin were experimenting with welfare reform long before, in August 1996, a new law allowed all the states to make their own welfare policy, subject to broad federal directives.

      Welfare benefits are now several times higher in generous states, such as Vermont, than they are in places like Wisconsin. Wisconsinians take pride in shortening their welfare rolls and seeing those who were previously dependent doing a proper job: Milwaukee alone cut its welfare rolls by more than 10,000 in the first six months of the state's new programme. Vermonters, however, have a different sort of social conscience. Although the state's income per head is modest, a large majority of its people feel that welfare benefits should be kept comparatively generous. In this area (and in others, such as a state's tolerance or non-tolerance of handguns), devolution offers Americans a real choice of government. If they dislike the way things are managed where they are, they can move-sometimes only a little way-to a place where the philosophy is more congenial.

      Yet welfare may be the last big devolution of federal power to the states. Congress and the federal government no longer talk about giving the states block grants to pursue their own policies in any other field; and, perhaps more to the point, state governors are not asking for them. Although the states remain bustling laboratories for different approaches to social policy, the real action has moved even further down through the layers of government, to innovative officials in the cities. Devolution has a tendency to keep on devolving; and, just as Washington is eager to off-load problem-solving to the states, so the states themselves are busy dumping responsibilities on to the next level of government.

      America's cities are the repositories of most of its social problems: they have the highest crime rates, the worst schools, the most intractable levels of joblessness. Rather than trying to reincorporate cities into their richer outlying regions (an almost impossible task), states are now leaving cities to get on with it. On crime and education in particular, mayors and police chiefs are seizing the initiative, despite foot-dragging in Congress or state legislatures. Thus the mayor of Chicago can take over the public schools, the mayor of Milwaukee can introduce school vouchers, the mayor of New Orleans can bring in a curfew, and the mayor of New York can pose as a tough marshal for putting up spending on community policing.

      The fact is that, if governors can be bolder than Congress or the president, mayors can be bolder even than governors. A governor seeking to reform education, for example, has to struggle to equalise spending, which is usually based on property taxes, across the whole state. In New Jersey, Governor Christine Whitman has just introduced a law to set state-wide teaching standards and to narrow the gap between school resources for rich and poor children. Although the plan is slowly taking effect, it is still said to be inadequately financed.

      At federal level, such broad schemes are impossible; Mr Clinton has felt obliged to make his proposed national school tests voluntary, since mandatory tests would be labelled a federal power-grab. Even at state level, governors can still be accused of riding roughshod over the sentiments of local school boards. At city level, however, with only one school district to consider, politicians and parents may be more easily persuaded to give the new ideas a chance.

      The relentless movement of government downwards has been helped by a recovering economy. After years of creative accounting and hand-to-mouth budgeting (almost all states are forbidden by their constitutions to run deficits), they have recorded surpluses for most of the 1990s. Going into 1998, according to a report from the National Governors Association, state budget surpluses totalled $24 billion. Tax collections are surging: the state-local sector now collects almost the same amount as the federal government. Some of this is being salted away, but much is being spent as the voters desire: 31 states cut taxes in 1996. Since 1990, expenditure by state and local government has risen 14.3% in real terms.

      Meanwhile, Congress in Washington is close to abolishing the national budget deficit, thanks to spending cuts (especially in defence) and cyclical shrinkage. And devolution affects government employment, too. State and local government also employ 1.8m more people now than in 1990, whereas the federal government employs 345,000 fewer. Whatever else devolution means, it does not mean quantitatively less government.

      The spending trends, of course, may prove temporary. Defence can suddenly cost more, if the need arises; an economic downturn may set local governments howling for more federal money. Yet even then the states and cities could show their independent spirit, raising money by privatising assets to a greater or lesser degree. Indianapolis, which has privatised 75 city services ranging from golf courses to repairing potholes, is now a magnet for mayors seeking to do the same.

      If the endless devolution of power has a drawback, it is one of accountability. A government that is closer to the people is not necessarily more honest or more transparent. As the police department in Philadelphia discovered, community policing may also provide more opportunities for kickbacks and for creative partnerships between policemen and criminals. As many reforming mayors have found, it may be harder to uncover corruption inside a town hall than inside the federal government.

      Nonetheless, devolution is a healthy and abiding tendency. To de-emphasise the federal government is to resurrect one of the original principles of American politics. The nation was conceived as a union of 13 pre-existing states. The concept of national citizenship, as distinct from state citizenship, did not even exist until 1787, 11 years after independence. In the early days, the states showed their distinctive personalities by what they did about slavery or the enfranchisement of non-citizens, rather than welfare policy or the length of prison terms. But whatever the issues, the taste for autonomy has endured and now seems, once again, to be growing.

      Nor is Washington keen to reassert its old prominence. Federal spending is set to keep falling, at least during the remaining life of this Congress or until the federal deficit disappears, an event confidently planned for 2002. At times, Congress even seems to want to promote the individuality of states. On December 2nd, Mr Clinton approved a plan to replace the existing 25-cent piece with one that will display any one of 50 logos from the 50 states. The new coin will commemorate both age-old pride and a new American decision to move back to smaller and more intimate government.