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Abstract: As scholars of local government have long noted, without adequate local revenue, home rule provides hollow legal authority. Recognizing the importance of local revenue, the National League of Cities’ Principles of Home Rule for the 21st Century (“Principles”) explicitly includes taxation as a power granted by home rule and articulates a constitutional commitment to adequate intergovernmental aid. To further strengthen local budgetary control, the model bans unfunded mandates and incorporates an anti-coercion principle that requires conditions on state aid relate to the purposes of such aid.
Together, the anti-coercion and unfunded mandate provisions limit state lawmakers’ ability to indirectly limit home-rule authority through state purse strings. This Article applies these provisions to three recent examples of state efforts to tie local fiscal support and taxing authority to substantive state policy goals. In doing so, the Article highlights the ways the Principles might strengthen local democracy and also explores the challenge local governments face when confronting state legislatures with oppositional policy preferences.
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