The core services that local governments provide, such as maintenance and public safety, are essential to a functional city. Local governments use the tax revenue they collect to fund various programs (or core services).
However, as with any institution that works with finances, local governments face financial constraints. The result: local governments must review their programs and decide how to allocate their limited funds.
In this video, you'll learn the Strong Towns perspective on core services, including:
- Why local governments should invest in its core downtown and poor neighborhoods.
- How budgeting varies between government and business.
- Why maintenance is the most important core service.
Written Answer (Adapted from the Video Transcript)
The central insight of Strong Towns is that all over North America, local governments are financially insolvent—even though many of them don't realize it yet. For decades, we have built more public infrastructure than we have revenue coming in to cover its long-term maintenance and replacement costs. In many cases, that maintenance bill hasn't come due yet, but as it does, cities will increasingly find themselves in a state of "soft default," forced to make difficult choices about what to fund and what to put off or let go.
The question, "What should a strong town consider its core services?" is an important one to ask in that spirit—what are the things that a local government should consider non-negotiable even if other priorities must fall by the wayside?
In this video answer from a prior Ask Strong Towns webinar, Strong Towns president Chuck Marohn tackles the "core services" question first by posing a question of his own: how does the private sector handle the issue of budget cutbacks?
When you look at a private sector organization nonprofit or a for-profit organization that runs into financial difficulties, what they tend to do is cut staff but retain programs, and the reason for that is that programs bring in revenue. They're necessary for the organization's future fiscal health.
On the other hand, governments, when they run into hardship, tend to cut programs but keep their staff—they might say, "We're not going to maintain these three roads this year. We're gonna put this park improvement project off a year or two." These decisions can seem financially prudent at the time, but they can also contribute to a vicious cycle of deferred maintenance and decline, as falling quality of life further erodes the city's tax base, and thus its ability to bring in revenue to do the maintenance it has deferred.
What are the essential things that the city does? It's hard to argue with the ones everyone cites, like public safety. But we would add a crucial one at Strong Towns: intense maintenance of your most productive areas.
When we studied Lafayette, Louisiana along with geoanalytics experts Urban3, we demonstrated that the most productive places in Lafayette are its core downtown and the surrounding neighborhoods, which tend to be the poorest. These are areas that should never lack maintenance. If a street light goes out, someone should very quickly see that and fix it. Weeds in the sidewalk should be pulled. If there's a pothole, it should be fixed.
This seems counterintuitive—people can live with potholes—but this kind of aggressive maintenance is a way of retaining the value of the areas that are bringing in net revenue to the city.
If a private company has five divisions, and one division is making money and four divisions are losing money, and that company experiences fiscal hardship, what does it do? What would you do as the CEO? Most likely, you would make sure that the one division that was making you money was really well taken care of, because by doing so, you're going to ensure that you actually have as much revenue as possible to make good on the other four—or to figure out what to do with the other four.
Cities are not private companies—they cannot "dissolve" a neighborhood the way a company can dissolve a division or a program. Their obligations are permanent. However, cities, at the end of the day, do need to bring in more revenue than they have obligations. And the way to do that is to know which areas are bringing in revenue and invest in keeping it that way. That is a core priority of a city, even—especially—in the case where the city has a backlog of maintenance needs and must do some sort of triage.