NLC Inventories State Preemption of Local Control, Fiscal Authority

By Kenneth Hunter, Line Item Editor

A recent report by the National League for Cities provides a comprehensive look at State government preemption of local authority on numerous social and economic issues. The report, “City Rights in an Era of Preemption: A State-by-State Analysis,” also includes a cursory examination of the range of controls exercised by states on municipal finances through tax and expenditure limits (TELs).

“State legislatures have gotten more aggressive in their use of preemption in recent years,” the report states. “Explanations for this increase include lobbying efforts by special interests, spatial sorting of political preferences between urban and rural areas, and single party dominance in most state governments.”

Among social and economic issues covered by the reports, the most common preemption reported were TELs, which are present in some shape or form in 42 states.

(From "City Rights in an Era of Preemption," National League of Cities, February 2017)

(From “City Rights in an Era of Preemption: A State-by-State Analysis,” National League of Cities, February 2017)

 

While the report focuses solely on local property taxes, many of which have been in place for decades, additional means of preemption have grown in recent year, often times as side effects of State efforts to address business concerns about challenges created by localized bureaucracy within the global environment of the 21st century. These examples include the loss or State consolidation of revenues from business privilege license fees, E-911 taxes, cable television franchise fees and more.

Click here to download this report.