US Local/County/City Industry Trends

Service Decentralization

Recent reform efforts focus on decentralizing managerial discretion and empowering operational managers in public sector management. Based on a national survey of US municipal governments, decentralizing purchasing responsibility has been less successfully implemented than have budgeting and personnel systems.

Property Tax Constraints

The steady rise of property taxes in previous decades prompted many states to enact laws that limit property tax increases. In Massachusetts, for example, annual property tax increases are limited to 2.5 percent unless local voters override the limit. This limit on the largest source of municipal revenues has forced local governments to look for other sources of revenue, such as user fees, and to more tightly regulate their spending budgets.

Education Spending Growth

Municipal spending on education has grown disproportionately in the past decade, even though the percentage of school-aged children in the US has increased only slightly. In Boston, for example, schools account for 35 percent of municipal spending. US jobs in local education increased 20 percent in the past decade.

Population Migration

The US population increases about 1 percent per year, but in some communities the growth rate can be higher than 5 percent per year because of migration into the area. Migration can affect the age makeup of a community and therefore the types of services the municipality is expected to offer. In many Florida retirement communities, for example, up to 30 percent of the residents are over 65 (national average: 12 percent) and municipal spending on education is well below average.