as a partnership, addressing shared public problems
with mutually developed policies.
States establish rules, regulations, and conditions
within the political and administrative systems that
affect local government budgets. State statutes spell
out detailed and stringent requirements on local governments’
budget and revenues. However, the intergovernmental
supervision has indirect means of review or
enforcement, which often relies on self-implementation
of requirements by local governments.
States enable local government to try management
techniques to reduce budget costs. States encourage
coordination and networking of governments in risk
or purchasing pools. States enable contracting out
and other methods to reduce costs of service production
or provision.
States supervise indirectly by their grants of
authority, by revenue sharing, by requiring actions
and services, and by requiring standard accounting
and auditing procedures. States control local government
budgets by setting specific limits on revenue
sources and amounts. In addition, states engage in
monitoring local governments by requiring them to file
budget and fiscal documents. States possess the authority
(although they seldom exercise it) to intervene
directly and circumscribe local government budget
actions.