The Woodrow Wilson International Center for Scholars was established by the US Congress and, according to its website, “provides nonpartisan counsel and insights on global affairs to policymakers through deep research, impartial analysis, and independent scholarship.” After his time at the Wilson Center, Robert Hawkins, Jr. was ultimately appointed by Republican President Ronald Reagan Chairman of the Advisory Commission on Intergovernmental Relations, where he served under both Reagan and George H.W. Bush administrations.

In exploring the question of whether suburbs “exploit” central cities, Hawkins puts his finger on a core feature of the era’s urban crisis “debate.” Many urban reformers considered suburbs to be exploitative: suburban residents used the services of the central city (e.g. highways) but much of their tax revenue stayed in the suburbs (e.g. property taxes on their homes). However, people like Hawkins might argue that such analysis overplayed the harms of the suburbs. He might argue that there are many services suburban residents did not use (e.g. school systems, fire departments), and taxes they still paid (sales tax collected when suburbanites ate and shopped in the city).

In exploring the question of whether suburbs “exploit” central cities, Hawkins puts his finger on a core feature of the era’s urban crisis “debate.” Many urban reformers considered suburbs to be exploitative: suburban residents used the services of the central city (e.g. highways) but much of their tax revenue stayed in the suburbs (e.g. property taxes on their homes). However, people like Hawkins might argue that such analysis overplayed the harms of the suburbs. He might argue that there are many services suburban residents did not use (e.g. school systems, fire departments), and taxes they still paid (sales tax collected when suburbanites ate and shopped in the city).

Host Jim Lehrer provides one example of why regional revenue sharing might lead to “perverse incentives”: a bloated, inefficient, city government might become dependent on outside financial aid rather than make the kind of fiscal reforms needed to become self-sufficient. Another “perverse incentive” that someone like Hawkins might identify is that cities would not take the necessary steps to promote new economic development in the central city. If a major city would receive some tax revenue even if a new business was established in the suburbs, there might be less incentive for cities to take the steps to attract new businesses back into the city. In the long run, this could contribute to continued economic stagnation.

Here, Hawkins explains another key argument used by opponents of regional revenue sharing programs: the principle of “local control.” The comparison to France is instructive. Unlike many European nation-states, in which national governments hold most of the decision-making power (and local governments largely exist to carry out national government mandates) more power is “devolved” to the state and local levels in the USA. States, counties, and cities exercise distinct taxing and lawmaking powers. The principle that “the government closest to the people serves the people best” (often attributed to Thomas Jefferson) aligned well with the views of suburban residents who thought it unfair and unwise to cede tax revenue to nearby cities.