INTRODUCTION
States supervise local government budgets by requiring
specific actions and procedures, by establishing
and limiting revenue sources, and by monitoring and
reviewing budget actions of local governments. States
fulfill their responsibility to supervise in five ways: states
enable, authorize, and empower local governments;
states set budget controls and fiscal limits; states impose
requirements and mandates; states employ administrative
supervision; and states intervene in fiscal crises.
The state supervisory role depends on state laws and
practices, as well as on the type of local government
involved. The patterns and types of state supervision
can only be described in general terms because there
is great variety within the 50 states and more than
85,000 local governments in the United States. The
types of local governments include counties, cities,
towns, townships, school districts, and special districts.
The jurisdiction of local governments may be based on
geography, services, or population. Counties and cities
are general-purpose governments, and they provide
a wide range of services. In contrast, special districts
often provide one service or function, and they are
the most numerous and varied type of local governments
in the United States. Within this diversity, states
exert control over local government budgets.
One of the most important government functions is
budgeting. Budgeting links the ability to tax and spend
with managerial planning. Other governmental powers
linked to budgeting include the ability to contract and to
define and undertake activities. By enabling and defining
local governments, states both empower and limit local
government budget authority. Few states directly charter
local governments and define their authority in detail; it is
more common for states to have general laws that express
broadly the extent of local governments’ powers and
functions. The techniques of state supervision range from
general to specific, and the amount of control states exert
over local governments ranges between loose and tight.