The Problem of the Cities

Ever since people began migrating in large numbers from America’s rural areas to its urban areas  in the 19th century, cities have presented unique challenges: sanitation, housing, transportation, education, public safety, and fire protection, to name just a few. Responding to these challenges typically entailed government intervention, the precursor to the Great Society and the modern welfare state.

As Edward Banfield noted in The Unheavenly City (1970), Chicago grew “from a prairie village of 4,470 in 1840 to a metropolis of more than a million in fifty years.”  Industrialization attracted 15 million new residents—including many immigrants from foreign countries—to American cities during the 1880-1900 period alone, and this trend accelerated in the early part of the 20th century.

The rapid growth of urban areas, increased population density, and a massive influx of immigrants—accompanying the explosion of manufacturing and commerce during the Gilded Age—hastened the rise of municipal political machines (such as Tammany Hall in New York City), official corruption, labor unrest, and the demographic diversity that continues to this day. Even though Americans’ standard of living generally improved during industrialization (people moved to the cities for a reason), the Progressive movement was in significant part a response to America’s nascent urban problems.

Progressivism is a legacy that endures, as we know, and for good or ill, urbanization has profoundly affected the American experience. Members of ethnic minorities disproportionately reside in U.S. cities, and their local governments are disproportionately (in fact more or less exclusively) in the hands of the Democratic Party. Cities expend substantial taxpayer resources to try to address poverty, crime, air pollution, congestion, substandard housing, homelessness, and the education of non-English speaking students, all of which are not as prevalent in suburban and rural areas.

Cities tend to have large numbers of unionized public employees, high (and rising) taxes and debt (including unfunded pension liabilities), and intrusive regulations. For a variety of reasons, urban residents favor liberal policies—and elect liberals to office—to a greater degree than suburban and rural voters. Some major American cities, such as Detroit, have become dysfunctional fiefdoms, forced into bankruptcy.

Proponents of classical liberalism generally favor limited government and free market solutions, but these views do not prevail in most American cities. Even in Texas, the reddest of red states, every major city is governed by a Democratic mayor, and local governments increasingly adopt liberal policies. The city of Denton, for example, banned fracking, a common extraction technique for oil and gas. The city of Austin forbids employers to ask about applicants’ criminal records before extending an offer of employment. The city of Dallas has mandated transgender bathroom access. Green energy mandates, plastic bag bans, “sanctuary city” status, and similar activist measures abound at the local level in the Lone Star State, creating, in the words of Texas Governor Greg Abbott, “a patchwork quilt of bans and rules and regulations that are eroding the Texas model.” Abbott warns that Texas’ cities are “California-izing” the state.

Not just in Texas, but throughout the country, cities are the tail wagging the dog of state government when one considers that localities are literally “political subdivisions” of the 50 states. Because of the Constitution’s Tenth Amendment, states have far more ability to regulate their local governments than the federal government has power over the states. When and how will the states assert such authority to rein in activist cities?

A recent decision of the Texas Supreme Court, BCCA Appeal Group, Inc. v. City of Houston, provides some guidance. An ordinance was passed by the city of Houston concerning local air quality, and this regulation of emissions within the city’s borders eventually included a compliance program, fee schedule, and penalty provisions—all of which are layered on top of the provisions of the statewide Texas Clean Air Act, which is enforced by the Texas Commission on Environmental Quality (TCEQ).

A group of chemical manufacturing plants and refineries subject to both state law and the city’s ordinance challenged the ordinance on preemption grounds. After winning in the trial court but losing in the court of appeals, the challengers sought and obtained review by the state supreme court.  In an 8 to 1 decision, the Texas Supreme Court ruled on April 29 that the ordinance was invalid because the Clean Air Act expressly forbids local ordinances not “consistent” with statutory provisions or TCEQ rules or orders.

The majority found that the ordinance was impermissibly inconsistent with state law in various respects, reasoning that “the Ordinance converts what is primarily an administrative and civil enforcement regime under state law into a primarily criminal enforcement regime, removing primary enforcement authority from the agency that can ensure consistent enforcement across the state and placing that authority in the hands of the local health officer, city personnel, and municipal court judges.”

While “home rule” cities such as Houston possess the right of self-government and do not depend on grants of authority from the state, their authority is subject to limitation by the state.   The Texas Constitution states that no city ordinance “shall contain any provision inconsistent with . . . the general laws enacted by the Legislature of this State.”

Thus, under the holding of BCCA Appeal Group, the Texas Legislature could, by statute, express the uniform public policy of the state in the area of, say, retailers’ use of plastic bags, pre-employment inquiries regarding applicants’ criminal records, or (regarding a topic recently in the news) conducting background checks for taxi cab and “ride sharing” drivers. By doing this, the Texas Legislature could preempt contrary city ordinances, preventing rent-seeking and meddlesome regulation at the local government level.

State legislatures could also rein in profligate local governments by restricting their ability to raise taxes, making it harder for them to incur bonded indebtedness (by requiring super-majority voter approval, for instance), prohibiting forced annexation, prohibiting taxpayer-funded lobbying, and even curbing the spending of financially-distressed cities  (as recently proposed by Stephen Eide in City Journal).

Cities present different challenges than they did a century ago, but the current problems are no less dire. Costly and ineffective public education systems, massively under-funded public employee pension plans, law-enforcement failures, high taxes, and uncontrolled spending imperil the security and solvency of America’s cities. Unless these problems are promptly addressed by responsible state reforms, more urban residents will face the tragic plight of Detroit, Chicago, Baltimore, and San Bernardino.

No state can thrive if its major cities become dysfunctional and/or bankrupt. Fortunately, these problems can be fixed—if state legislatures are willing to assume their legitimate role and exercise statewide governance to curb local government excesses.