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NC—Solvency—Local Law Enforcement



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States CP
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2NC—Solvency—Local Law Enforcement

Cutting off local municipalities solves best – it alleviates top-down pressure to support federal policies and allows local governments to invest in projects specific to their constituents


Edwards 2019 – director of tax policy studies at Cato and editor of www​.Down​siz​ing​Gov​ern​ment​.org
(By Chris Edwards May 20, 2019 “Restoring Responsible Government by Cutting Federal Aid to the States” Policy Analysis No. 868 https://www.cato.org/publications/policy-analysis/restoring-responsible-government-cutting-federal-aid-states) IB
Federal aid warps state and local spending decisions. It induces states to spend more on federally subsidized activities, and less on other activities that state residents may value more. For example, the rapid growth in state Medicaid spending—induced by generous federal matching payments—has likely squeezed out other activities in state budgets. Urban transit provides another example of how aid warps state budgets. Since the 1970s, federal aid for transit has been mainly for capital costs, not for operations and maintenance. That has induced dozens of cities to purchase systems with big up‐​front costs, which usually means expensive rail systems rather than cheaper bus systems, even though the latter are usually more efficient, flexible, and safer.59 The number of U.S. cities with rail transit has grown from eight in 1975 to 42 today, and the construction costs of nearly all these new systems were subsidized with federal aid.60 One consequence of the bias toward rail is that many cities are now getting stung by huge rail maintenance costs years after federal aid induced them to build the systems. U.S. transit systems have deferred maintenance costs of more than $90 billion, and systems across the nation are suffering from breakdowns, delays, and safety hazards.61 The New York City and Washington, DC, subway systems, for example, are in poor shape. Yet those cities have been prompted by federal aid to keep expanding their systems rather than ensuring the good performance of the lines they already have. A 2017 New York Times investigation of the Metropolitan Transit Authority found lavish spending on new projects—subsidized by federal aid—and at the same time a shocking neglect of subway maintenance. The result has been declining service quality, fires, derailments, and other disasters. The Times noted: The estimated cost of the Long Island Rail Road project, known as East Side Access, has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track—seven times the average elsewhere in the world. The recently completed Second Avenue subway on Manhattan’s Upper East Side and the 2015 extension of the No. 7 line to Hudson Yards also cost far above average, at $2.5 billion and $1.5 billion per mile, respectively. The spending has taken place even as the M.T.A. has cut back on core subway maintenance.62 Meanwhile, the Washington, DC, metro system is building a $5.8 billion subway line to Dulles airport, with $2.9 billion coming from federal grants and loans.63 That dubious expansion is going ahead even though the system has suffered from appalling maintenance and safety failures in recent years and ridership is declining. Delays plague the system, and there have been crashes and dozens of incidents of smoke in tunnels in recent years.64 It is a similar story with the Massachusetts Bay Transportation Authority, which faces $7 billion in maintenance backlogs, but continues to build new lines.65 A recent boondoggle in Albuquerque, New Mexico, illustrates how federal aid can also encourage cities to spend on ill‐​suited bus systems. City leaders sprang for an expensive $133 million electric bus system because federal subsidies covered more than half of the costs. But the Los Angeles Times reports that the “project resulted in parts of what’s now Central Avenue being ripped up to host dedicated lanes for the electric buses, which are currently out of commission and have so many problems that [Mayor] Keller freely calls them ‘a bit of a lemon.’ ”66 Residents did not want the buses, local businesses hated them, and dozens of businesses along the dedicated bus route have closed. Another recent boondoggle is a 20‐​mile rail project in Honolulu, which has soared in cost from $5 billion to more than $9 billion. The Wall Street Journal reported on some of these problems in 2019: Honolulu pushed ahead before fully planning the project.… Officials misled the public about the train line’s shaky finances … [and] an audit by the city found HART’s [Honolulu Authority for Rapid Transportation] financial plan in disarray, with hundreds of millions of dollars unaccounted for.67 This wasteful project was likely only approved because of the lure of federal aid secured by Hawaii’s late senator Daniel Inouye. Federal aid induces state and local governments to make decisions that are divorced from the actual needs of their own citizens. A classic example was the urban renewal or “slum clearing” wave of the mid‐​20th century, which used billions of federal aid dollars beginning in 1949 to bulldoze poor neighborhoods in favor of grand development schemes.68 A 1963 analysis of these federally driven projects found that “wholesale clearance of slum areas and pillar‐​to‐​post relocation of the families who lived there have generated wide discontent. Members of racial and ethnic minorities who have seen the slum buildings they occupied replaced by luxury apartment houses have grown resentful of city planning that rarely seems to make adequate provision for their needs.”69 At the time, urbanist Jane Jacobs said of these projects: “This is not the rebuilding of cities. This is the sacking of cities.”70 One infamous federal‐​aid project in the early 1980s was the demolition of the Poletown neighborhood of Detroit. The City of Detroit condemned more than 1,300 homes over 465 acres and removed 4,200 people through eminent domain so that General Motors could build a new plant. The city demolished 143 businesses and 16 churches.71 Economist William Fischel argues that the Poletown expropriation would not have happened without hundreds of millions of dollars of federal grants and loans as well as state subsidies.72 Many residents protested, but Ralph Nader noted that citizen activists were “muzzled by the grants machine that Washington provided city governments.”73 Local politicians would be much more cautious before proceeding with grandiose and harmful projects if they had to balance the expected benefits with local tax costs. The dangling of federal and state money causes cities to make decisions that their own citizens do not want. Fischel, for example, says that grants to cities encourage the excessive use of eminent domain, and he points to the 2005 Kelo v. City of New London case in Connecticut as another example of top‐​down subsidies inducing a local government to expropriate private property for the sake of developers. Federal and state subsidies prompt city politicians to disenfranchise their own residents and spend on dubious projects that the cities would not pursue if they had to raise their own local funds.


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