Fiscal Governance of Metropolitan Areas: Council Government Vs. Strong Mayor Government - Case Study Example

Fiscal Governance of Metropolitan Areas Name: Institution: Date: Introduction City governments play a great role of enhancing the provision of complimentary public services important for any city to attain complete economic potential. Fiscal governance of a city can be considered efficient only if it fosters competition as well as choice based on neighborhood financing, distribution of obstructed city services such as fire protection, education, garbage collection and basic policing. There must be an institution of strong city mayor selected through competitive city-wide elections to enable financing and the provision of less obstructed city-wide services such as public health, courts, prisons and infrastructure. Inman (2003) argued that efficient city finances involve appropriate assignment of expenditures as well as taxing powers. He added that structural institution of city politics and governing rules are important in ensuring effective use of powers to increase resident welfare and development. Once the ideal financing and the required organizational structures are put in place, the next important task is deciding on the appropriate city level, expenditures and taxes. This implies that major cities in the world developed their own systems of governance which differs significantly from one country to another. In New York, for instance, historical boundaries as well as government models are considered essential when determining new systems of fiscal governance. However, in some other cities such as Toronto and Berlin great changes have been introduced to their city governance arrangements (Inman, 2003). The research discusses the fiscal governance of the Metropolitan areas by comparing how efficient council government is in relation to strong mayor government in terms of budgeting. New York vs. Toronto is used as areas of case study. General argument on budgets in strong mayor cities typically less expensive and more efficient Although variations exists between the main structures of government, the major difference is on deciding whether or not to give the mandate to serve as the chief administrator within the city, In a council-manager system of government, both the mayor and council sit together to formulate policies, hire professionals and city managers or administrators unlike in the strong-mayor structural government where the council is centrally left with responsibility to formulate the policies and the mayor approves them. Today, most of the city budgets are determined not through the issue-by-issue referenda approach, instead by elected city representative government. It has been argued that delegate city government may involve two forms either the council government or the strong mayor government. The strong executive system of governance, for instance, city-wide elected delegate provide agenda-setting supremacy. This means that projects evaluated with less neighborhood-wide service and city-wide service costs can not be included on the agenda, but incase they are considered they are vetoed. It is apparent that strong mayor governance supported by a more strong and local political institution, sustainably control such vetoes based on the votes of party members in legislature (Fitts and Inman, 1992). Therefore, it is relevant to argue that budgets within the strong mayor cities are generally less expensive and more efficient compared to budgets found in the council-only cities (Baqir, 2002). Metropolitan authorities that derive their legitimacy from their own city-wide residents are able to make strategic decisions on how they can balance their resources and development to the entire city areas. Furthermore, city authorities can either explicitly or implicitly redistribute both incomes and resources in form of taxation and developing spending policies. Based on municipal finance point of view, the different characteristics of bigger cities or metropolitan areas reflect the high and complex expenditures that the local governments in such areas are expected to spend on the municipal services. It is quite clear that large cities as well as metropolitan areas have more fiscal autonomy in comparison to rural areas in regard to the increased responsibilities for the local services and the more powers to levy taxes and achieve their revenue (Slack 2002). Municipal finance within the metropolitan areas becomes more complicated due to the local governments’ multiplicity in charge of service provision and revenue generation in larger regions. It is important to argue that the costs incurred by local governments are generally higher within the metropolitan areas compared to the rest of other municipalities. For example, a high population calls for more customized police services, similarly, high poverty or special needs in bigger metropolitan areas involves higher expenditures, for instance, on the social services and housing as well as public health (Freire, 2001). Local government is not only identified with higher expenditures within the larger metropolitan areas in comparison with the smaller cities, but also discovered to be higher within the central cities than suburban areas. In 2008, the municipal per-capita expenditure of Toronto city was surveyed to be 50 percent higher compared with the normal for larger Toronto area and Ontario province. Furthermore, property taxes for the per-capita are as well identified to be higher than as it is within the suburbs, and thus temporary conditional transfers are dominant in the city which reflects the existence of cost-sharing agendas for the social welfare. It has been reported that Toronto levies more taxes not available in suburban municipalities. Research on governance and value, indicates that though appropriate allocation of spending responsibilities as well as financing instruments are considered important in achieving efficient city finances, but not sufficient. Therefore, organizations of city governance are required to align political interests of the selected city officials to economic interests of individuals living as well as working in the city (Kitchen 2010). A comparison of the two governance structures - New York as a strong-mayor leader and Toronto as a weak mayor New York New York City has developed strong mayor model, though its city council that operates under the charter introduced by the State legislature of New York is weak. However, powerful legitimate limits have been put on the federal government taking part in municipal activities. The city has a directly-elected mayor held responsible for social care, garbage collection, education, public housing, hospitals, police force and fire protection. The municipal resources for New York City are acquired from the various and locally-set taxes deducted on incomes, property or sales. Studies indicate that about 70 percent of the total activities done in New York are financed through local taxation. A strong and directly-elected fiscal governance state, New York Mayor is perceived to be a very powerful urban politician across the world. Thus, plays a great role in determining the strategic path to the city’s economic development. It is apparent that the strong mayor of New York has the entire significant mandate to influence policies, including fiscal ones important in securing cohesion in the city (Sassen, 2000). All the expenditures made by agencies on the provision of education, policing, health care and business promotion are directly controlled by the City Hall. Therefore, as a mayor of a larger city such as New York, the struggle to control the complex politics of structure and ruling out is a continuous task. For example, the continued balance of immigration within the city as well as the ability to prevent the occurrence of worst problems generated as a result of insufficient social cohesion, fiscal government arrangements within New York City have been efficient (Inman, 2003). The competitive fiscal governance of the U.S. suburbs creates compelling evidences which support the use of a centralized system to control public financing for the various city services. In addition, the system of governance ensures that marginal revenue exceeds or be equal to the marginal costs in delivery of the city services. The highly considered cleanest and well-managed local government within the U.S. is not the strong-mayor government, but the council-manager governments, a structure occupying nearly half of U.S’ local government. The mayor is not just the only one expected to play the role of chief executive office and the day-to-day management of responsibilities as well as decision-making, the role is executed by a professional in city management hired by both mayor and the city council. This implies that both the mayor and city council work in collaboration to make laws, set policies, establish as well as approve budgets (Inman, 2003). Toronto Similar to New York City, Toronto has been considered the largest city in Canada. However, six municipalities including the Toronto municipality and smaller cities were consolidated into a new and larger Toronto governmental unit headed by a directly-executive both of mayor and city council. Toronto city has had a continued debate on provincial government and city relations as well as making decisions on how the city or metropolitan areas must be governed. The newly developed Toronto administration has a comparatively limited authority and duties. However, Ontario provincial government is in charge of the many important service provision duties. It is relevant to argue that Toronto’s Mayor is comparatively weak position in authority because of its limited powers. The three levels or systems of city governance in Toronto include federal government, the city and province, each with its unique tasks in service provision. Unlike it is the case with New York, no party politics found in the municipalities of Canada (Slack, 2002). In Canada, particularly in Toronto city there have been evolutions to the development of metropolitan government, though the movement to such direction has been limited. Metropolitan institutions of governance are largely becoming an important tier of regulation in concerning the future Toronto city. The post-1998 Greater London Authority (GLA) makes the transfer from one metropolitan area to another accessible. Metropolitan government not only concern about competition, cohesion and efficiency, but also involves political identity. The 1998 Toronto reform, for instance, is a shift towards the wider metropolitan system of government. In Toronto, more attention is given on developing some new strategies of bringing the centralized leadership as well as cohesion to a large municipal bureaucracy. However, it is important to realize that the subject of city governance is more than municipal. Generally, Canada has various municipal structures and there is no evidence that one form governance is more efficient that the other. This indicates that Canadians have devoted more attention to the municipal structures instead of focusing more on improving the cities. It has been reported that the major post-amalgamation problem in Toronto has led and controlled the mass administrative behemoth created through amalgamation. This problem originates from mayors in the Ontario municipalities identified limited independent lawful authority. The mayors does not have the power to fully control the stable majority with votes on the city councils, indicating that they do not regularly provide credible commitments to be followed by the city (Slack, 2002). Recommendations on how to choose the right blend model of governance/finance The strong mayor government should be the most recommendable system of governance in metropolitan areas of developing countries because it does not involve the widespread scattering of the administrative responsibilities, and thus provide an executive budget of less costs since the mayor takes control of an integrated as well as administrative structure. Proponents of a strong mayor system of governance argue that it offers strong political and improved administrative leadership for metropolitan areas. Unlike the weak mayor system of governance, strong mayor model does not involve broad division of roles and responsibilities. This helps to minimize costs incurred to compensate for the labor force used to deliver public services to the community. Therefore, the strong mayor is assigned with responsibility to manage the city and provide the necessary authority to accomplish the task since the formulation and implementation of policies are generally enhanced through this system of governance of the metropolitan areas (Bohn & Inman, 1996). Strong mayor system of governance will be relevant for metropolitan areas in developing countries because of its strong leadership characteristics uniquely identified centralized responsibility. It also facilitates the formulation and implementation of policies to enable efficient delivery of social services in metropolitan areas. Additionally, the system allows for direct election to be carried out by the people to decide on the best chief officer to lead the city. In small towns, a person who is not competent or lack the knowledge and experience may be selected run the town. However, in Council-manager settings give the council opportunity to decide on their own mayor which becomes disadvantageous with strong mayor as fewer conflicts may be observed unlike in situations where the selected mayor could be a person not had the chance to lead a one council member. This means that the mayor may appear not to be well-trained administrator (Kitchen 2010). Since the mayor is elected citywide and held accountable to a larger constituency compared to a single council member, the strong-mayor system of governance is highly recommendable because it is cost-efficient to compensate the mayor than paying a council member. A case for the Commerce City, a Weak Mayor model of government would be appropriate since the council members would be elected as leaders as well as policy-makers to represent a particular business community. This means that council members would focus on formulating policies which are more responsive to the various needs of citizens in metropolitan areas of developing countries. The question remains what causes one political governance system to be more effective than another. It is important to argue that all models can offer effective or successful political governance provided certain pre-conditions are put in place or modifications to a specific model are directed to the real and perceived obstacles that hinder certain jurisdictions from realizing the cost-effective political governance and if the model can ether be implemented or modified in a more consistent manner based on the cultural context of jurisdiction such as civil culture, tradition, or political culture. Some of the preconditions that should be considered include strong political leadership, clearly defined roles and responsibilities, respect and professionalism, high quality public service, a mayor or council head that is more effective as well as reinforcing a culture driven by rewards and sanctions (Sullivan & Skelcher, 2002). The effectiveness of various administrative structures should also be considered. Although the strong-mayor and council models of governing may provide effective governance, the cultural context of a given municipality should be the underlying factor when determining whether or not a model is effective in an identified situation. For instance, a model could be inconsistent with the existing political or cultural tradition of certain jurisdiction, and thus making it unworkable. Therefore, a model of governance can only be considered effective if its administrative structure provides more operational efficiency and efficiency, for example, when integrated with the performance-based contracting. The structure should provide clear understanding of the specific roles and responsibilities played by politicians as well as administrative staff. There must be enhanced coordination and integration of the municipal programs and the related activities. Special attention must be given to structures that value accountability and responsibility in a model to enable effective administrative performance of a municipality. Metropolitan areas in developing countries should ensure that an administrative structure used provides distinctively separates operations and policies to enable political as well as bureaucratic components of the municipal government pay more attention to their roles (Healy, 2004). Conclusion From the above discussion, it can be concluded that Fiscal governance of a city is efficient only if it fosters competition as well as choice based on neighborhood financing, distribution of obstructed city services such as fire protection, education, garbage collection and basic policing. Major cities in the world have developed their own systems of governance which differs significantly from one country to another. The competitive fiscal governance of the U.S. suburbs creates compelling evidences which support the use of a centralized system to control public financing for the various city services. Strong mayor governance supported by a more strong and local political institution, sustainably control vetoes based on the votes of party members in legislature. A number of the city budgets are determined not through the issue-by-issue referenda approach, instead by elected city representative government. A model of governance can only be considered effective if its administrative structure provides more operational efficiency and efficiency. Council-manager settings give the council opportunity to decide on their own mayor which becomes disadvantageous with strong mayor. Unlike the weak mayor system of governance, strong mayor model does not involve broad division of roles and responsibilities. References Baqir, R. (2002). Districting and Government Overspending, Journal of Political Economy, Vol.110, 1318-1354. Bohn, H & Inman, R., (1996). Balanced Budget Rules and Public Deficits: Evidence from the U.S.States, Carnegie-Rochester Conference Series on Public Policy, Vol. 45, 13-76. Fitts, M & Inman, R., (1992). Controlling Congress: Presidential Influence in Domestic Fiscal Policy, Georgetown Law Journal, Vol. 80. 1737-1785. Freire, M. (2001). The Challenge of Urban Government: Policies and Practices. Washington, D.C.: World Bank Institute. Healy, P., (2004). Creativity and urban governance. Policy Studies, 25(2), 87-102. Inman, R. (2003). Transfers and Bailouts: Enforcing Local Fiscal Discipline with Lessons from U.S. Federalism, Fiscal Decentralization and the Challenge of Hard Budget Constraints, Cambridge, MA: MIT Press, 35-83. Kitchen, H.M. (2010). Canada: Governance and Finance of the Greater Toronto Area and Metro Vancouver. Toronto. Sassen, S., (2000) The Global City: New York, London, Tokyo. (new updated edition). Princeton University Press. Slack, E. (2002). Municipal Finance and the Pattern of Urban Growth. Toronto: C.D. Howe Institute. Sullivan, H & Skelcher, C. (2002). Working Across Boundaries, Collaboration in Public Services, Palgrave Macmillan. Read More