More government units mean higher spending for some public services - Metropolitan Planning Council

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More government units mean higher spending for some public services

Illinois should have the best parks, libraries and fire protection among the nation’s 10 most populous states.

That’s because local governments in Illinois collectively spent the most per capita on each of those functions among peer states during fiscal year 2015, the most recent year for which data were available, according to a Metropolitan Planning Council analysis of local government finance data collected by the U.S. Census Bureau.

Perhaps Illinois simply values its parks, libraries and fire protection more than other states. And maybe the higher spending indeed means those services are better in Illinois than other states. However, MPC's analysis suggests that the spending for such services in Illinois is elevated due, in part, to the sheer number of government units maintaining our parks, managing our libraries and protecting us from fires.

MPC’s analysis showed strong correlations between the number of local governments and the amounts they spent to provide a variety of public services.

Simply put, the more park districts, library districts and fire protection districts a state had, the more local governments spent to provide those services. And no state had more units of local government or more single-purpose special districts than Illinois.

In all, Illinois had nearly 7,000 units of government and more than 3,200 single-purpose special districts. Illinois had more than 830 such districts providing fire protection, nearly 400 providing parks and recreation, and more than 340 managing libraries, according to the U.S. Census Bureau's 2012 Census of Governments. 

There could be a variety of reasons why more units of government could lead to higher spending, including each unit bearing their own costs for executive leadership, administrative support, real estate, contractual services and equipment, among others.

Duplicating those costs for dozens to hundreds of more local government units can add up to billions of dollars in additional costs each year. For that reason, many have suggested that those services could be provided more efficiently by consolidating some single-purpose units of government or sharing services, employees or other costs.

For instance, just for fire protection, libraries and parks and recreation functions, local governments in Illinois collectively spent more than $5.7 billion in fiscal year 2015. That's about $2 billion more than if local governments in Illinois provided those services at the same rate per capita as local governments do nationwide, according to MPC's analysis.

MPC compared what local governments spent for a variety of public functions in the nation’s 10 most populous states, which included, in rank order of population, California, Texas, Florida, New York, Illinois, Pennsylvania, Ohio, Georgia, North Carolina and Michigan. The spending figures were adjusted for the cost of living in each state as reflected by 2015 regional price parities provided by the U.S. Bureau of Economic Analysis.

The public functions analyzed included education, libraries, social services, transportation, police, fire, parks and recreation, government administration, and utilities among others.

For fire protection, libraries and parks and recreation functions, Illinois was ranked first among the nation's 10 most populous states in the number of single-purpose special districts per capita providing each of those services.

Illinois was also ranked first among those states in per capita expenditures for local governments to provide each of those services in fiscal year 2015, according to MPC's analysis.

It should be noted that the spending figures for fire protection, libraries and parks and recreation were for all local governments and not just for single-purpose special districts. In fact, some of the states analyzed did not have single-purpose special districts for libraries or fire protection.

Still, the strong correlations between the number of such districts per capita and the per capita spending by local governments for libraries, parks and fire protection suggests that those added layers of local government may contribute to the heightened levels of spending for those functions.

Per capita parks and recreation spending by local governments in Illinois was about $193 in fiscal year 2015, about 81 percent higher than the nationwide figure. That spending level was high even among peer states. Parks and recreation spending per capita in Illinois was 46 percent higher than it was in Florida, which ranked second in that category among the nation's 10 most populous states.

Local governments in Illinois spent about $54 per capita to operate libraries, 57 percent higher than the nationwide figure. Again, the figure in Illinois was far higher than it was for peer states. Library spending per capita in Illinois was about 29 percent higher than it was in Ohio, the next closest state in such spending among the nation's 10 most populous states.

For fire protection, local governments in Illinois spent more than $200 per capita, almost 41 percent more than the nationwide figure.

While those three functions, in all, represented just 7 percent of all local government expenditures in Illinois during fiscal year 2015, we’re still talking about real money—close to $6 billion in spending.

MPC also found a strong correlation between government administration spending per capita and the number of government units per capita. Not only did Illinois have more units of government than any other state, Illinois had more units of government per capita than any of the nation's 10 most populous states. And, in fiscal year 2015, at $317 per capita, Illinois ranked second among those states in spending for government administration, trailing only Ohio.

On the flip side, MPC’s analysis showed strong negative correlations between the number of government units and the amount spent for other public functions. For these public functions, the more units of government meant fewer dollars spent to provide those services. MPC’s analysis showed strong negative correlations between the number of government units and spending for both social services and solid waste management.

Among the nation’s 10 most populous states, Illinois ranked dead last in per capita spending for both of those functions. In fact, for social services—which includes financial assistance to low-income families, public hospitals, payments to private hospitals for indigent care and health clinics serving the poor among other functions—local governments in North Carolina, California and New York each spent around $1,200 per capita, four times more than the $275 per capita spent by local governments in Illinois.

For Illinois to get the most bang out of its local government bucks, the state needs to take more stock of the ways in which some public functions are provided. The very structure of local government in Illinois may be robbing the state and its citizens of precious limited dollars to serve some of its basic needs, and in particular, those of its most vulnerable citizens.

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