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The Rise of the Public AuthorityStatebuilding and Economic Development in Twentieth-Century America$
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Gail Radford

Print publication date: 2013

Print ISBN-13: 9780226037691

Published to Chicago Scholarship Online: September 2013

DOI: 10.7208/chicago/9780226037868.001.0001

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Municipalities Struggle to Meet New Needs

Municipalities Struggle to Meet New Needs

Chapter:
(p.71) THREE Municipalities Struggle to Meet New Needs
Source:
The Rise of the Public Authority
Author(s):

Gail Radford

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226037868.003.0004

This chapter charts the search by municipal officials, starting in the 1890s, for ways to fund the expansion of infrastructure. Some of this infrastructure produced services which could easily be charged to users, raising the possibility that these investments could pay at least part of their way. Despite widespread public support for municipal ownership of revenue-generating operations, most state courts initially blocked this option on the basis that direct involvement in the economy was an unconstitutional expansion of government power. Public officials came up with two basic strategies to circumvent the rules. One was the special taxing district, a legally separate governmental institution not subject to the debt caps that constrained general-purpose government. The second strategy was the “revenue bond,” a financial instrument based on the concept that a city should be able to borrow beyond its legal limit if no burden was incurred by taxpayers. While both special taxing districts and revenue bonds were useful for funding public-sector activities, municipal officials still had to seek permission from state legislatures each time they wanted to employ one of these strategies, a process that was always laborious and often unsuccessful.

Keywords:   municipal officials, public funds, public services, special taxing district, revenue bonds, local government

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