Urban Policy in a Changing Federal System Proceedings of a Symposium (1985) / Chapter Skim
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4. National-Urban Relations in Foreign Federal Systems: Lessons for the United States
4. National-Urban Relations in Foreign Federal Systems: Lessons for the United States
Pages 91-126
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From page 91... ...
in its report, Managing Urban Change, cited a list of problems affecting urban areas in the more advanced OECD countries that would seem quite familiar to most Americans.
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From page 92... ...
Manufacturing 1973 1982 Services 1973 1982 Australia 23.9% 18.8% 49.5% 56.1% Austria 35.7 31.0 43.5 49.1 Belgium 31.8 24.1 Canada 22.4 18.2 43.8 49.2 France 27.9a 24.7a 45.0 50.5 Japan 27.4 24.5 42.7 49.0 Netherlands 25.Ql 20.5a 53.3 60.0 New Zealand 25.0 24.0C 44.3 47. Norway 23.5 19.7 44.8 52.9 Sweden 27.4 22.4 49.5 57.0 Switzerland 35.0 32.~ 42.4 47.3b United Kingdom 32.2 25.4 48.0 56.3 United States 24.8 20.4 43.8 47.6 West Germany 36.4 35.0b 39.1 43.2 NOTE: ~Manufacturing.
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From page 93... ...
Before acceding to this temptation, however' some further consideration is in order. Although scholars have disagreed quite substantially on the proper definition of federalism, nearly every definition assumes the existence of a regional level of government interposed between national and local governments, with the regional government having at least some spheres of activity in which it is able to make final decisions (i.e., it is not merely an administrative unit of central government)
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From page 94... ...
In the United Kingdom, a country in which the substance of urban problems is close to our own, the central government conducts relations with local governments, which have the ability to make final decisions about important issues of urban policy. Central government relations with local authorities are direct, because an intermediate government layer does not exist.
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From page 95... ...
The Canadian constitution, on the other hand, leaves residual powers to the federal government. The United Kingdom is, by contrast, a unitary state in which all powers reside with the central government.
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From page 96... ...
1 - 1.8 C NA NA -20. 5 West Germany Munich M 1970-78 3.0 - 8.8 11.6 C 1970-78 NA NA 0.2 Bamburg M 1970-78 - 4.6 -16.
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From page 97... ...
Under the constitution only foreign policy, the federal finances, the federal railways, the federal postal service, the federal waterways, and the federal armed forces are subject to direct federal administration. In all other policy areas, there are no federal field agencies and all nonlegislative functions are carried out by the states and local government employing their own financial resources, with the federal government having no further say in the matter.
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From page 98... ...
Australia Austria Canada Switzerland United Kingdom United States West Germany 6.8 20.0 22.4 23.6 29.2 25.1 18.0 SOURCE: organization for Economic Co-operation and Development (1983a) ; plus data from the United States and United Kingdom derived by author.
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From page 99... ...
In Australia, Canada, Austria, and the United Kingdom, some specialpurpose grants are made directly from the national government to local authorities, although not nearly to the extent as in the United States. In Germany and Switzerland all federal grants must be made to the state rather than local governments.
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From page 100... ...
This method is not utilized substantially in any of the countries examined, although the attachment of conditions to state grants is not uncommon Relationship through Negotiations Local government associations play an important and quasi-formal role in consultations and, in some cases, negotiations with the national governments in Germany, Austria, Switzerland, and the United Kingdom, but much less so in Australia and Canada. In effect, these more formal consultative arrangements with local government associations substitute for the more direct federal relationships with individual local governments in the United States.
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From page 101... ...
provides 75 percent matching funds to local authorities for economic development and social services in inner city areas. The central government also provides cities with housing and transport grants.
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From page 102... ...
their programs to the advantage of urban areas. The coordination of national government policies affecting urban areas has been a problem recognized to some extent by nearly all of the countries, including the United States and the United Kingdom, the two countries in which responsibility for urban problems is most firmly lodged within a single national department.
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From page 103... ...
as a means of bringing about urban regeneration in those areas. Unlike the partnership authorities, the Urban Development Corporations are superimposed on the existing local authorities in the two areas and provided with much broader development powers than the local authorities have.
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From page 104... ...
, for example: The coordination of government efforts to provide an economic development stimulus in lagging areas has been primarily accomplished through the mechanism of the federal-provincial conferences and subsequent intergovernmental agreements, which, in effect, provide both levels of government with a vehicle for assessing some degree of joint financial responsibility for the attainment of objectives in their common interest, or spheres of responsibility. In Germany, the economic problems of the Ruhr region-a large, heavily urbanized industrial area -- have attracted federal government concern not evidenced toward other urban industrial regions.
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From page 105... ...
In the United Kingdom several large urban areas are also in regions eligible for regional incentives. DIVISION OF FUNCTIONS AND REVENUE SOURCES In most of the foreign countries examined, as in the United States, the federal system resembles a Marble cake.
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From page 106... ...
Despite these differences) local governments in all of the countries except Australia perform a broad range Qua services, frequently in conjunction with, and partially funded by, state or national governments.
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From page 107... ...
In both Canada and Australia, local authorities are also largely confined to the property tax for ownsource tax revenues. In Switzerland, municipalities are typically permitted to levy a variety of taxes, although the exact mix varies from state to state.
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From page 108... ...
Local governments receive 15 percent of the federal income tax raised from citizens residing within the local government's boundaries. German local governments are also permitted to levy a property tax and a business and trade tax (a tax on business capital assets and profits)
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From page 109... ...
The actual distribution of local tax revenues by source is shown in Table 4-4. The table clearly reveals the importance of the property tax as a local revenue source in the United Kingdom, Canada, and Australia, as well as in the United States, and the importance of the income tax in Germany and Switzerland.
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From page 110... ...
TABLE 4-5 Grants as a Percentage of Local Government Revenue (1980 unless otherwise specified) Country Percentage Australia Austria Canada Switzerland United Kingdom United States West Germany 21.9% (1979)
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From page 111... ...
In Canada and Switzerland, however, equalizing fiscal capacity is the dominant concern and little effort is made to take need into account. Fiscal equalization efforts are primarily vertical -- that is, a higher level of government redistributes resources among lower levels of government on an equalizing basis.
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From page 112... ...
Australian local governments do not receive federal equalization grants. However, as noted earlier, a portion of federal tax revenues is set aside for distribu tion by each state to its local governments.
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From page 113... ...
The grant-related poundage is the single tax rate that all local authorities are expected to levy to finance their GREG. Obviously, the same grant-related poundage will result in differences among local authorities in the amount of revenue raised because of differences in local fiscal capacity.
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From page 114... ...
The German federal government does not provide general resources to the states through a grant system, but through the tax-sharing system described above. Of the two major shared taxes, the income tax is shared with the states and municipalities on a point-of-origin basis, while the value-added tax is shared with the states on a redistributive basis, taking equalization objectives into account.
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From page 115... ...
In Austria, a complex tax-sharing system results in substantial equalization among the states. In addition, a federal per capita equalization grant is paid by the federal government to states that have below average fiscal capacity (in terms of per capita receipts from the various tax-sharing schemes, since 96 percent of all state revenue is derived from tax sharing)
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From page 116... ...
and fiscal capacity. In Switzerland, federal tax sharing and specialpurpose grants are provided on an equalizing basis to the states.
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From page 117... ...
The lesson the United States needs to learn is not how to set up equalizing intergovernmental transfers; it is how to develop the political will to do so. Second, direct national-local relations through the grant systems are much more prevalent in the United States than in the other federal countries, where the pattern is for federal grants to the state level and state grants to the local level.
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From page 118... ...
Third, formal negotiations or consultations between local government associations and the national government -- particularly with respect to grant arrangements -- exist in many of the other countries. In the United States individual city governments and local government associations lobby the federal government, but they are rarely brought so overtly into the governmental process.
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From page 119... ...
Finally, state governments play a much stronger role with respect to their urban areas in other federal countries than in the United States. This observation, the explanation for which has already been touched on, suggests that any national urban policy in the United States should pay particularly close attention to the role of the states.
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From page 120... ...
Centre for Research on Federal Financial Relations. Canberra: Australian National University Press.
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From page 121... ...
U.S. Advisory Commission on Intergovernmental Relations, Washington, D.C.
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From page 122... ...
Canberra: Australian National University Press. 1980b Federalism in Retreat: The Abandonment of Tax Sharing and Fiscal Equalization.
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n.d. Central Government and the Management of Urban Policy.
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From page 124... ...
Centre for Research on Federal Financial Relations. Canberra: Aus tralian National University Press.
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From page 125... ...
European Central Government Policies Towards Declining Urban Economies. Research Report 1492-01.
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From page 126... ...
Federal/State-Local Fiscal Relations. Working Paper 0237-01.
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