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Unformatted text preview: ase in the share of GDP paid in state/local taxes, not because of a significant reduction in federal taxes as a
share of GDP or by an obvious shift of authority from the federal to state and local government. Much of state
expenditure growth is in response to federal matching programs over which states have limited control. Also, federal
control over state revenue authority is effectively growing, meaning the decentralization may be more apparent than real. 2. NUMBER OF GOVERNMENT UNITS The U.S. is composed of one federal, fifty state and many sub-state governments. The number of states has not
changed since 1959, when Alaska and Hawaii became states, but there have been many changes in the number of substate governments. The role that different types of sub-state governments play varies by state, but there are similarities
by region across the U.S.
The number of sub-state governments declined from 116,807 in 1952 to 87,504, but the entire decline had taken place
by 1982 when the total bottomed out at 78,269 (Table 1). The pattern differs dramatically both within types of generalpurpose governments (cities, counties, and townships) and between general purpose and special purpose districts. The
number of general-purpose governments has stayed relatively constant, particularly for counties, a level of government
covering the geographic area of the U.S., and townships (which are primarily important in New England). The number of
municipalities has increased by about 15.3 percent since 1952.
NUMBER OF GOVERNMENTS
1997 Federal State County Municipal Town or
Townships School District
Governments Special District
34,683 Opposite trends have occurred for school districts and other special (usually single) purpose districts. The number of
school districts fell from 67,335 in 1952 to 13,726 in 1997, with consolidation occurring at both the district and school
level. Other special purpose districts, for water, sewer and other services, rose rapidly from 12,340 in 1952 to 34,683 in
1997. Thus, changes in the total number of governments are explained by the degree to which school district declines
offset the increase in other districts. School district declines dominated for the first 20 years of the study period, and
growth in other special districts dominated in subsequent years.
1 Much has been written in recent years about concepts of decentralization, devolution, and other means of categorizing shifts from national to subnational governments. This paper is using these concepts interchangeably to focus on the extent to which substantive shifts are taking place between
levels of government in the U.S. 15 Commission on Fiscal Imbalance 3. REVENUE DECENTRALIZATION Decentralization of revenues has occurred throughout the post World War II era. Tax revenue in the U.S. has grown
slowly but continuously as a share of GDP for many years (se...
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