A New Measure for Local Aid

States may tie strings to their helping hand.
by | May 2007

Buffalo's economic woes began almost 50 years ago, when competition and foreign goods began taking their toll on the city's once-great manufacturing industry. Over a half-billion dollars in federal and state aid later, Buffalo's economy is still ailing, and New York Governor Eliot Spitzer is proposing a new approach to helping distressed municipalities such as Buffalo: strings-attached aid.

Spitzer's pitch ties aid to a new set of criteria municipalities must meet to qualify for an aid package. Under his 2007-08 budget proposal, distressed cities would have to develop multi-year fiscal performance plans and show how the infusion of money would be used to provide property-tax relief, support essential economic development investments or fund cost-saving technology investments.

Other governors are also setting limits on local aid. Michigan's Governor Jennifer Granholm included a provision in her proposed budget this year that calls on localities to save money by sharing or consolidating services. Those that don't share services and costs with their neighbors would have their state funding frozen at current levels; those that do could get more money.

Regardless of whether Spitzer's municipal-aid proposal wins legislative approval, it has already been viewed with skepticism by bloggers and newspaper editorial writers. The point of contention is whether such strings will spur revitalization or stifle it.

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