Local redistribution, living wage ordinances, and judicial intervention

Northwestern University Law Review

Volumn 101, Issue 3, 2007, Pages 1057-1122

  Gillette, Clayton P ^a  

^a NEW YORK UNIVERSITY   (United States)

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EID: 34548356920     PISSN: 00293571     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (288)

1. See Living Wage Resource Center, Living Wage Wins, http://www.livingwagecampaign.org/index.php?id=1959 (last visited Feb. 1, 2007). A few of the ordinances were enacted and subsequently repealed.
2. See Fran Spielman, Daley's Big-Box Veto Holds Up, CHI, SUN TIMES, Sept. 14, 2006, at 8.
3. See, e.g., Jon Gertner, What is a Living Wage?, N.Y. TIMES, Jan. 15, 2006 (Magazine), at 38;
4. Scott Adams & David Neumark, The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns 18-25 (Nat'l Bureau of Econ. Research, Working Paper No. 11342, 2005), available at http://papers.nber.org/papers/w11342.pdf (finding that living wages generate enhanced wages for those who obtain jobs, but have negative effects on low-wage worker employment).
5. See, e.g., Mark D. Brenner, The Economic Impact of Living Wage Ordinances 18-28 (Political Econ. Research Inst. Working Paper Series, Paper No. 80, 2004), available at http://www.umass.edu/peri/pdfs/WP80.pdf (arguing that ordinances increase municipal budgets and lead to varied strategies by different employers about laying off workers and passing costs on to customers). For competing studies on the employment effects in one adopting city, Santa Fe,
6. compare AARON S. YELOWITZ, EMPLOYMENT POLICIES INST., SANTA FE'S LIVING WAGE ORDINANCE AND THE LABOR MARKET 1-7 (2005), available at http://www.epionline.org/studies/yelowitz_09- 2005.pdf,
7. with NICHOLAS POTTER, BUREAU OF BUS. & ECON. RESEARCH, MEASURING THE EMPLOYMENT IMPACTS OF THE LIVING WAGE ORDINANCE IN SANTA FE, NEW MEXICO 5-22 (2006).
8. See JOHN CULLIS & PHILIP JONES, PUBLIC FINANCE AND PUBLIC CHOICE 303-05 (2d ed. 1998);
9. WALLACE E. OATES, FISCAL FEDERALISM 131-40 (1972); PAUL E. PETERSON, CITY LIMITS 182-83 (1981) [hereinafter PETERSON, CITY];
10. PAUL E. PETERSON, THE PRICE OF FEDERALISM 27-28 (1995) [hereinafter PETERSON, PRICE]; Richard A. Musgrave, Fiscal Federalism, in JAMES M. BUCHANAN & RICHARD A. MUSGRAVE, PUBLIC FINANCE AND PUBLIC CHOICE 160-61 (2000). For a view that local governments can use income taxes to redistribute wealth without significant migration effects,
11. see Timothy J. Goodspeed, A Re-Examination of the Use of Ability to Pay Taxes by Local Governments, 38 J. PUB. ECON. 319 (1989).
12. OATES, supra note 5, at 132.
13. Support for the thesis that high levels of welfare services attracts a high level of beneficiaries is found in PETERSON, PRICE, supra note 5, at 108-28.
14. For more on the debate, see William C. Wheaton, Decentralized Welfare: Will There Be Underprovision?, 48 J. URB. ECON. 536 (2000) (developing model of welfare provision by states when assistance is decentralized and recipients are mobile);
15. F.H. Buckley & Margaret F. Brinig, Welfare Magnets: The Race for the Top, 5 SUP. CT. ECON. REV. 141 (1997);
16. Note, Devolving Welfare Programs to the States: A Public Choice Perspective, 109 HARV. L. REV. 1984 (1996).
17. New Orleans Campaign for a Living Wage v. City of New Orleans, 825 So. 2d 1098, 1100-08 (La. 2002).
18. See Rachel I. Rosen, Note, The Rise and Potential Fall of Living Wage Laws: Missouri Hotel & Motel Association v. City of St. Louis, 21 J.L. & COM. 131 (2001).
19. New Mexicans for Free Enterprise v. City of Santa Fe, 126 P.3d 1149, 1156 (N.M. Ct. App. 2005).
20. Visiting Homemaker Servs. v. Bd. of Chosen Freeholders, 883 A.2d 1074, 1080-85 (N.J. Super. Ct. App. Div. 2005). These decisions follow earlier approvals of local minimum wage ordinances. See, e.g., Mayor of Bait. v. Sitnick, 255 A.2d 376 (Md. 1969) (approving local minimum wage ordinance); City of Atlanta v. Associated Builders & Contractors, 242 S.E.2d 139 (Ga. 1978) (same).
21. RUI One Corp. v. City of Berkeley, 371 F.3d 1137 (9th Cir. 2004).
22. New Orleans Campaign for a Living Wage, 825 So. 2d at 1102-08.
23. See Elaine B. Sharp & Steven Maynard-Moody, Theories of the Local Welfare Role, 35 AM. J, POL. SCI. 934, 935 (1991) (documenting significant variance in the redistributive spending from zero to approximately $150,000 per thousand population (in 1977 dollars)).
24. Professors Glaeser and Kahn report that cities with a population in excess of 1 million spend 2.5% of their budget on local welfare expenditures, while localities with populations between 2,500 and 10,000 spend 0.7% of their budget on local welfare expenditures. See Edward L. Glaeser & Matthew E. Kahn, From John Lindsay to Rudy Giuliani: The Decline of the Local Safety Net?, FED. RES. BANK N.Y. ECON. POL'Y REV, Sept. 1999, at 117, 117. One potential explanation for this phenomenon is that redistribution requires an economically diverse population. Larger cities tend to have more economic diversity than smaller localities.
25. U.S. CENSUS BUREAU, 2002 CENSUS OF GOVERNMENTS: FINANCES OF MUNICIPAL AND TOWN-SHIP GOVERNMENTS 11 tbl. 6 (2005), available at http://www.census.gov/prod/2005pubs/gc024x4.pdf. The explanation of "Public Welfare" expenditures indicates that they include: any payments for applicable cash benefits in excess of, or supplementary to, those financed with federal or state participation. General relief, which is wholly financed from state and local sources, makes up most other cash assistance. Other public welfare spending includes: vendor payments under various public welfare programs, including the federally supported medical care program commonly known as Medicaid; institutional care for the needy; and administration of welfare activities.
26. Id. at ix. Thus, it appears that these figures are net of Federal and state contributions.
27. See id.
28. See id. at 11. Total direct expenditures were calculated at $358.6 billion.
29. Id.
30. Peterson includes within "redistributive expenditures" all unreimbursed monies spent on "pensions (including social security), medicare, welfare assistance, housing, medicaid, food stamps, supplemental social insurance, special educational programs for the disabled, and other programs directed at dependent groups in the population." PETERSON, PRICE, supra note 5, at 64.
31. Peterson omits spending on education on the theory that the main effects of those expenditures are developmental, a category that includes expenditures that assist economic growth and are separate from redistributive expenditures. He contends that educational spending has less to do with student learning than other variables. Id. at 64-67.
32. Id. at 71.
33. Few localities impose income taxes, and many of those that do impose taxes at flat rates. Nevertheless, some cities, such as New York City, introduce at least mild progressivity into their income taxes. See New York City Income Tax Information, http://dab.nfc.usda.gov/pubs/docs/taxformulas/formulas/ statecitycounty/taxny-c/taxny-c.html (last visited Feb. 1, 2007).
34. See, e.g., ANTHONY DOWNS, RESIDENTIAL RENT CONTROLS: AN EVALUATION (1988).
35. PETERSON, PRICE, supra note 5, at 17;
36. see also PETERSON, CITY, supra note 5, at 43.
37. See, e.g., Minn. Energy and Econ. Dev. Auth. v. Printy, 351 N.W.2d 319 (Minn. 1984); State ex rel. McLeod v. Riley, 278 S.E.2d 612 (S.C. 1981), overruled by WDW Props, v. City of Sumter, 535 S.E.2d 631 (S.C. 2000).
38. See, e.g., Friends of Parks v. Chi. Parks Dist., 786 N.E.2d 161 (Ill. 2003); Cohen v. City of Phila., 806 A.2d 905 (Pa. Commw. Ct. 2002); CLEAN v. State, 928 P.2d 1054 (Wash. 1996). The presence or absence of local benefits from local subsidies arouses passions among sports fans and economists.
39. See Gerald Carlino & N. Edward Coulson, Compensating Differentials and the Social Benefits of the NFL, 56 J. URB. ECON. 25 (2004) [hereinafter Carlino & Coulson, Compensating Differentials] (arguing that public expenditures create quality of life benefits that justify new stadium subsidies);
40. Dennis Coates, Brad R. Humphreys & Andrew Zimbalist, Compensating Differentials and the Social Benefits of the NFL: A Comment, 60 J. URB. ECON. 124 (2006) (arguing that they do not);
41. Gerald Carlino & N. Edward Coulson, Compensating Differentials and the Social Benefits of the NFL: Reply, 60 J. URB. ECON. 132 (2006) (arguing that they do);
42. DEAN V. BAIM, THE SPORTS STADIUM AS A MUNICIPAL INVESTMENT (1994);
43. Donald L. Alexander, William Kern & Jon Neill, Valuing the Consumption Benefits from Professional Sports Franchises, 48 J. URB. ECON. 321 (2000);
44. Dennis Coates & Brad R. Humphreys, The Effect of Professional Sports on Earnings and Employment in the Services and Retail Sectors in US Cities, 33 REGIONAL SCI. & URB. ECON. 175 (2003).
45. See DaimlerChrysler Corp. v. Cuno, 126 S. Ct. 1854 (2006).
46. There is a lively debate about the extent to which business incentives actually produce enough economic activity to offset the subsidies that localities provide to attract the beneficiaries of the programs. In addition to the sources cited in supra note 24,
47. see, for example, the essays included in SPORTS, JOBS, AND TAXES: THE ECONOMIC IMPACT OF SPORTS TEAMS AND STADIUMS (Roger G. Noll & Andrew Zimbalist eds., 1997) [hereinafter SPORTS, JOBS, AND TAXES];
48. Timothy J. Bartik, Evaluating the Impacts of Local Economic Development Policies on Local Economic Outcomes: What Has Been Done and What is Doable!, in OECD, EVALUATING LOCAL ECONOMIC AND EMPLOYMENT DEVELOPMENT: How TO ASSESS WHAT WORKS AMONG PROGRAMMES AND POLICIES 113 (2004), available at http://wwwl.oecd.org/ publications/e-book/8404031E.PDF.
49. See, e.g., WILLIAM H. SIMON, THE COMMUNITY ECONOMIC DEVELOPMENT MOVEMENT 105-09 (2001).
50. See Bartik, supra note 26, at 118.
51. See supra text accompanying notes 18-19. The local expenditures pale in comparison to redistributive expenditures made by the federal government, which Peterson estimates as increasing from $114.3 billion to $560.7 billion during the same period.
52. PETERSON, PRICE, supra note 5, at 66.
53. These local outlays are similarly surpassed by the redistributive expenditures of state governments, which Peterson estimates increased from $34.4 billion to $136.9 billion. Id. at 71.
54. See, e.g., Wis. STAT. ANN. § 104.001 (2006).
55. For an argument to create legal barriers to the creation of business incentives, see Peter D. Enrich, Saving the States from Themselves: Commerce Clause Constraints on State Tax Incentives for Business, 110 HARV. L. REV. 377 (1996).
56. For an argument that the competition among localities within a small geographic area may be negative-sum, see Jonathan Schwartz, Note, Prisoners of Proposition 13: Sales Taxes, Property Taxes, and the Fiscalization of Municipal Land Use Decisions, 71 S. CAL. L. REV. 183 (1997).
57. Elsewhere, I have given some reasons to doubt claims that interjurisdictional competition is necessarily negative-sum. See Clayton P. Gillette, Business Incentives, Interstate Competition, and the Commerce Clause, 82 MLNN. L. REV. 447 (1997).
58. As formulated by its originator, John Dillon, the Rule permitted localities only to exercise those powers expressly granted by the legislature, those powers "necessarily . . . implied" from express grants, and those powers "essential to the accomplishment of the declared . . . purposes" of localities. JOHN F. DILLON, 1 COMMENTARIES ON THE LAW OF MUNICIPAL CORPORATIONS 448-51 (5th ed. 1911). Any doubt was to be resolved against the exercise of a power. See id.
59. See ERIC H. MONKKONEN, THE LOCAL STATE: PUBLIC MONEY AND AMERICAN CITIES 57-77 (1995).
60. See Lowell v. City of Boston, 111 Mass. 454 (1873) (invalidating bonds proposed to be issued by city of Boston to reconstruct housing destroyed in conflagration).
61. Subsequent constitutional restrictions on the state, however, revealed that state legislators could not be trusted to restrain local redistribution. Constitutional amendments that prohibited the legislature from enacting "special legislation" in favor of one or a few localities became popular in the latter part of the nineteenth century. The legislative enactments targeted by the prohibition had tended to permit specific localities to dedicate local resources to particular groups that apparently had more political support in the legislature than in city councils. JON C. TEAFORD, THE UNHERALDED TRIUMPH: CITY GOVERNMENT IN AMERICA 1870-1900, at 84-94, 105-07 (1984).
62. See, e.g., City of Miami Beach v. Fleetwood Hotel, Inc., 261 So. 2d 801 (Fla. 1972) (invalidating rent control ordinance).
63. See, e.g., Wholesale Laundry Bd. of Trade, Inc. v. City of New York, 234 N.Y.S.2d 862 (N.Y. App. Div. 1962) (invalidating local minimum wage ordinance). But see McMillen v. Browne, 200 N.E.2d 546 (N.Y. 1964) (upholding local minimum wage ordinance).
64. See, e.g., Greater Boston Real Estate Bd. v. City of Boston, 705 N.E.2d 256 (Mass. 1999).
65. Some of these opinions indicated antipathy towards redistribution at more centralized levels of government as well, insofar as they blocked assistance by the state as well as local governments. See, e.g., In re Opinion of the Justices, 98 N.E. 611 (Mass. 1912) (public funds could not be used to provide homes to wage-earners); Salisbury Land & Improvement Co. v. Commonwealth, 102 N.E. 619 (Mass. 1913).
66. See, e.g., Mass. Home Mortgage Fin. Agency v. New Eng. Merchs. Nat'l Bank, 382 N.E.2d 1084 (Mass. 1978); Mass. Hous. Fin. Agency v. New Eng. Merchs. Nat'l Bank, 249 N.E.2d 599 (Mass. 1969).
67. See, e.g., WDW Props, v. City of Sumter, 535 S.E.2d 631 (S.C. 2000); ROBERT S. AMDURSKY & CLAYTON P. GILLETTE, MUNICIPAL DEBT FINANCE LAW: THEORY AND PRACTICE 114-57 (1992); Richard Briffault, Forward: The Disfavored Constitution: State Fiscal Limits and State Constitutional Law, 34 RUTGERS L.J. 907, 910-27 (2003).
68. See, e.g., In re Okla. Dev. Fin. Auth., 89 P.3d 1075, 1081 (Okla. 2004) (stating that a legislative finding of public purpose "should be reversed only upon a clear showing that it was manifestly arbitrary, capricious, or unreasonable").
69. See Kelo v. City of New London, 545 U.S. 469 (2005); Clayton P. Gillette, Kelo and the Local Political Process, 34 HOFSTRA L. REV. 13 (2005).
70. These are the issues that have transformed public choice into a growth industry. See, e.g., KENNETH J. ARROW, SOCIAL CHOICE AND INDIVIDUAL VALUES (2d ed. 1963); DENNIS C. MUELLER, PUBLIC CHOICE m (2003); DANIEL FARBER & PHILIP FRICKEY, LAW AND PUBLIC CHOICE (1991).
71. See, e.g., Georgette C. Poindexter, Economic Development and Community Activism, 32 URB. LAW. 401, 405-06 (2000).
72. See, e.g., Gary Schwartz, The Logic of Home Rule and the Private Law Exception, 20 UCLA L. REV. 671 (1973) (arguing that the private law exception to expansive home rule power is consistent with desire to reduce effectiveness of local interest groups); Clayton P. Gillette, In Partial Praise of Dillon's Rule, or, Can Public Choice Theory Justify Local Government Law?, 67 CHI.-KENT L. REV. 959 (1991).
73. There is obviously a normative element to the conclusion that local preferences should be maximized, since individuals likely do not form their residential preferences after intense, objective consideration and deliberation over alternatives or free of distorting influences. Residential choices may be path-dependent, habitual, or arbitrary. Choices may be further constrained by history, geography, or socioeconomic characteristics of current residents. Some residents will tolerate local characteristics only because they cannot afford their preferred alternatives, suffer from information gaps about available options, or act irrationally in the face of preferences. Where one grows up, what one's peers consider a good place to live, limitations imposed by employment, and socially constructed values about the desirability of urban or suburban life will all affect residential decisions, even without considered reflection. Moreover, attributing preferences to a locality as a whole cannot imply that every resident shares identical preferences or that preferences are perfectly expressed and formed. Residents are likely to disagree over the selection of municipal budgets, ordinances, and governing procedures. Those who prevail may represent those who can best organize rather than those who represent majoritarian preferences or those who feel most strongly about an issue. Localities offer a bundle of services, some of which will be desired by any given resident, some of which will be ignored, and some of which will be disfavored. See, e.g., Lee Anne Fennell, Contracting Communities, 2004 U. ILL. L. REV. 829, 873-77. The impossibility of disaggregating the bundle reduces the likelihood that any part of it accurately reflects constituent preferences. Relatively immobile residents will, by definition, tolerate much more deviation between the local characteristics that they confront and those that they prefer before deciding to vote with their feet. Nevertheless, it is equally unrealistic to assume that the characteristics that distinguish localities from each other do not reflect the deliberate choices of a critical mass of constituents. Given the wide range of goods and services that a locality could provide, and given the incentive of localities to compete for firms and for residents, the choices a locality does make are likely to reflect to a broad extent the characteristics that numerous residents wish to cultivate. Even localities that initially display characteristics that are purely fortuitous are likely subsequently to attract residents for whom those characteristics are salient and desirable, so that evolutionary processes - if not deliberate ones - will cause localities to develop personalities that stick.
74. See Armen A. Alchian, Uncertainty, Evolution, and Economic Theory, 58 J. POL. ECON. 211 (1950).
75. It is unlikely that pure coincidence explains why San Francisco is more responsive to the needs of the homeless than other California localities, see Richard Thompson Ford, Bourgeois Communities: A Review of Gerald Frug's City Making, 56 STAN. L. REV. 231, 243-45 (2003) (book review), that Sun City Center finances more services for the elderly than communities that do not actively court retirees,
76. see FRANCES FITZGERALD, CITIES ON A HILL 203-16 (1987), or that Boston attracts more colleges and universities than Omaha. I cannot warrant whether these distinctions developed from deliberative decisions, But once these characteristics are entrenched, relatively mobile residents and potential residents emigrate from and immigrate to these localities based on their sympathy with those characteristics. It is this very capacity of local government to permit sorting according to preferences that provides many of the efficiency and community-based benefits that are attributed to local government.
77. See Michael W. McConnell, Federalism: Evaluating the Founders ' Design, 54 U. CHI. L. REV. 1484, 1493-94 (1987) (book review). Even to the extent that local characteristics reveal preferences, for my purposes nothing normative necessarily follows. The willingness of localities to signal preferences is also the basis of many of the most unattractive elements of local government, such as exclusionary zoning and ethnic segregation. When sorting falls along lines that offend important social values, law can intervene to preclude discrimination along the offensive metric. Nor does preference satisfaction necessarily entail treating cities "simply as objects of consumption."
78. See GERALD FRUG, CITY MAKING: BUILDING COMMUNITIES WITHOUT BUILDING WALLS 169 (1999). Individuals may have residential preferences for amenities that are not easily classified as consumable, such as neighbors who are socioeconomically diverse, close-knit identity groups, or open-air spaces.
79. See Andrew Haughwout, Robert Inman, Steven Craig & Thomas Luce, Local Revenue Hills: Evidence from Four U.S. Cities, 86 REV. ECON. & STAT. 570 (2004).
80. See sources cited supra note 5-7.
81. See PETER DREIER, JOHN MOLLENKOPF & TODD SWANSTROM, PLACE MATTERS: METROPOLITICS FOR THE TWENTY-FIRST CENTURY 135 (2001);
82. PETERSON, CITY, supra note 5, at 41-43. This is the standard assumption of courts that uphold municipal financing for industrial development.
83. See, e.g., CLEAN v. State, 928 P.2d 1054 (Wash. 1996); Friends of Parks v. Chi. Parks Dist., 786 N.E.2d 161 (Ill. 2003).
84. See Timothy J. Goodspeed, Tak Competition, Benefit Taxes, and Fiscal Federalism, 51 NAT'L TAX J. 579 (1998).
85. See, e.g., Coates & Humphreys, supra note 24.
86. See, e.g., Enrich, supra note 31, at 380, 397-401.
87. See, e.g., THE ECONOMICS AND POLITICS OF SPORTS FACILITIES (Wilbur C. Rich ed., 2000);
88. SPORTS, JOBS, AND TAXES, supra note 26;
89. Harrison S. Campbell, Jr., Professional Sports and Urban Development: A Brief Review of Issues and Studies, 29 REV. REGIONAL STUD. 272 (1999). In the case of stadium construction, some of the evidence suggests that sports franchises generate consumption benefits that augment any financial benefit or offset any financial loss to the financing locality.
90. See, e.g., Alexander, Kern & Neill, supra note 24;
91. Carlino & Coulson, Compensating Differentials, supra note 24. For an argument that localities are likely to use business incentives, i.e., local redistribution to the non-poor, only when expected benefits exceed costs (which is not to say that local officials cannot be overly optimistic in their predictions of benefits),
92. see Gillette, supra note 31. Numerous states have offered substantial subsidies in order to attract automobile manufacturers. To date, these programs appear to have had mixed success in terms of generating financial benefits that offset the amount of the subsidy.
93. See Buying Jobs Can be Expensive, THE ECONOMIST, Nov. 29, 2003, at 29, 30. The Alabama Supreme Court declared that part of a bill providing subsidies to attract a Mercedes-Benz plant to that state would violate the state constitution,
94. See Opinion of the Justices, 665 So. 2d 1357 (Ala. 1995) (advisory opinion).
95. For reviews of literature testing the effects of differential welfare benefits, see Jan K. Brueckner, Welfare Reform and the Race to the Bottom: Theory and Evidence, 66 S. ECON. J. 505, 514-18 (2000);
96. Robert Moffitt, Incentive Effects of the U.S. Welfare System: A Review, 30 J. ECON. LIT. 1, 31-36 (1992).
97. Brueckner finds mixed evidence that welfare recipients migrate for higher benefits, but does not speculate about emigration of the rich from those jurisdictions. For an interesting historical study that suggests that the poor did not migrate from one locality to another nearby one that offered more generous welfare benefits, see Kyle D. Kauffman & L. Lynne Kiesling, Was There a Nineteenth Century Welfare Magnet in the United States? Preliminary Results from New York City and Brooklyn, 37 Q. REV. ECON. & FIN. 439 (1997).
98. See Edward A. Zelinsky, Unfunded Mandates, Hidden Taxation, and the Tenth Amendment: On Public Choice, Public Interest, and Public Services, 46 VAND. L. REV. 1355 (1993).
99. See Kirk J. Stark, City Welfare: Views from Theory, History, and Practice, 27 URB. LAW. 495, 517-20 (1995).
100. See CONN. GEN. STAT. § 17b-116 (repealed 2004).
101. See CITIZENS BUDGET COMMISSION, CONFRONTING THE TRADEOFFS IN MEDICAID COST CONTAINMENT 11 (2004).
102. CAL. WELF. & INST. CODE § 17000 (West 2004).
103. See McConnell, supra note 47, at 1493-94;
104. Charles M. Tiebout, A Pure Theory of Local Expenditures, 64 J. POL. ECON. 416 (1956);
105. DREIER ET AL., supra note 50, at 97-98.
106. See Clayton P. Gillette, Opting Out of Public Provision, 73 DENV. U. L. REV. 1185 (1996).
107. See, e.g., Richard Briffault, A Government for Our Time? Business Improvement Districts and Urban Governance, 99 COLUM. L. REV. 365 (1999);
108. Robert C. Ellickson, Cities and Homeowners Associations, 130 U. PA. L. REV. 1519 (1982);
109. Robert C. Ellickson, New Institutions for Old Neighborhoods, 48 DUKE L.J. 75 (1998). The caveat in the text is important. There are cases in which those who can benefit from an increased level of provision will simultaneously attempt to reduce public levels of expenditure from which they don't benefit. But in many of these cases, even those who wish to supplement the baseline level of provision will want that baseline to be high in order to minimize the cost of supplementation.
110. See Gillette, supra note 62, at 1209-10.
111. See Mark V. Pauly, Income Redistribution As a Local Public Good, 2 J, PUB. ECON. 35, 38 (1972).
112. Id. at 57. On the ability of one person to obtain positive utility from satisfaction of the wants of another, see AMARTYA SEN, RATIONALITY AND FREEDOM (2002).
113. See, for example, the services provided by the Cambridge, Massachusetts Department of Human Services, http://www.cambridgema.gov/DHSP2/. The Berkeley, California Municipal Code contains not only a living wage ordinance, but also a rent stabilization ordinance. BERKELEY MUN. CODE ch. 13.27.010-.100, 13.76.010-.190 (1977).
114. PETERSON, PRICE, supra note 5, at 88-89.
115. MICHAEL J. SANDEL, DEMOCRACY'S DISCONTENT 131-32 (1996).
116. See Saenz v. Roe, 526 U.S. 489 (1999); Shapiro v. Thompson, 394 U.S. 618 (1969).
117. See Helen F. Ladd & Fred C. Doolittle, Which Level of Government Should Assist the Poor?, 35 NAT'L TAX. J. 323, 331 (1982).
118. See Robert C. Ellickson, Controlling Chronic Misconduct in City Spaces: Of Panhandlers, Skid Rows, and Public-Space Zoning, 105 YALE L.J. 1165 (1996).
119. See, e.g., Fifth Ave. Presbyterian Church v. City of New York, 293 F.3d 570 (2d Cir. 2002) (city prohibited from removing homeless persons from church property notwithstanding apparent complaints from church neighbors).
120. For the proposition that relative position is an important motivator of consumption, see ROBERT H. FRANK, LUXURY FEVER 107-21 (1999).
121. See Erzo F.P. Luttmer, Group Loyalty and the Taste for Redistribution, 109 J. POL. ECON. 500 (2001).
122. The shift to the "Care Not Cash" program was mandated by the adoption of Proposition N by the San Francisco electorate in November 2002. For a description of the program, see The Care Not Cash Initiative, S.F. ADMIN. CODE § 20 (as amended).
123. Of course, some support may also have been attributable to a desire to remove the homeless - or have them remove themselves-from San Francisco if they could no longer receive cash. See Ford, supra note 47, at 243-44. That certainly has been one effect of the program. The San Francisco Department of Human Services reported in July 2005 that its County Adult Assistance Program caseload declined 78% in the first 15 months of the Care Not Cash program.
124. See Care Not Cash Monthly Update (July 2005), http://www.sfgov. org/site/uploadedfiles/dhs/CareNotCashMonthlyUpdateJuly05.pdf. But even that effect suggests the willingness of the relatively wealthy to support programs that decrease what they perceive as disamenities.
125. FRANCES FOX PIVEN & RICHARD A. CLOWARD, REGULATING THE POOR: THE FUNCTIONS OF PUBLIC WELFARE 183-338 (1971).
126. See Richard C. Fording, The Conditional Effect of Violence as a Political Tactic: Mass Insurgency, Welfare Generosity, and Electoral Context in the American States, 41 AM. J. POL. SCI. 1 (1997);
127. Sharp & Maynard-Moody, supra note 14;
128. Joe Soss, Sanford F. Schram, Thomas P. Vartanian & Erin O'Brien, Setting the Terms of Relief: Explaining State Policy Choices in the Devolution Revolution, 45 AM. J. POL. SCI. 378 (2001). For my purposes, these motivations remain "benign" notwithstanding that they emerge from selfishness rather than altruism. Recall that I classify explanations for redistribution as benign as long as they are consistent with the interests of residents, regardless of what motivates the formation of those interests.
129. Of course, the evidence here is mixed. Compare Adams & Neumark, supra note 3,
130. with Michael Reich, Peter Hall & Ken Jacobs, Living Wage Policies at the San Francisco Airport: Impacts on Workers and Businesses, 44 INDUS, REL. 106, 128-32 (2005) (finding no evidence of employment decline after implementation of living wage policies at San Francisco Airport).
131. John M. Quigley, Urban Diversity and Economic Growth, J. ECON. PERSP., Spring 1998, at 127, 130-32.
132. See MASAHISA FUJITA & JACQUES- FRANCOIS THISSE, ECONOMICS OF AGGLOMERATION: CITIES, INDUSTRIAL LOCATION, AND REGIONAL GROWTH 172-73 (2002).
133. PHILIP D. CURTIN, CROSS-CULTURAL TRADE IN WORLD HISTORY 1 (1984).
134. ANNA LEE SAXENIAN, REGIONAL ADVANTAGE 37-49 (1994).
135. Quigley, supra note 80, at 131.
136. Id. at 131-32.
137. See, e.g., Michael Cooper, Business Group Backs Raise in New York Minimum Wage, N.Y. TIMES, July 15, 2004, at B2, (reporting that a business group in New York City seeks an increase in the state minimum wage in order to maintain City's competitive position by attracting high quality workforce).
138. See PETERSON, CITY, supra note 5, at 43.
139. Quigley, supra note 80, at 132.
140. See Eric Schmitt, To Fill Gaps, Cities Seek Wave of Immigrants, N.Y. TIMES, May 30, 2001, at A1.
141. See, e.g., Stephen Moore, Immigration and the Rise and Decline of American Cities (1997), available at http://www.hoover.org/publications/ epp/epp81.html (finding that high-immigrant cities had double the job creation rate, higher per capita incomes, lower poverty rates and less crime than low-immigrant cities, although they also have high unemployment rates).
142. See Edward L. Glaeser & Jesse M. Shapiro, City Growth and the 2000 Census: Which Places Grew, and Why, BROOKINGS INST. CTR. ON URB. AND METRO. POL. SURVEY SERIES, May 2001, at 12.
143. Jennifer S. Vey & Benjamin Forman, Demographic Change in Medium-Sized Cities: Evidence from the 2000 Census, BROOKINGS INST. CTR. ON URB. AND METRO. POL. SURVEY SERIES, July 2002, at 6.
144. Id.
145. Some confirmation of this can be found in Roberto Suro & Audrey Singer, Latino Growth in Metropolitan America: Changing Patterns, New Locations, BROOKINGS INST. CTR. ON URB. AND METRO. POL. SURVEY SERIES, July 2002, at 7 ("Many Hispanics, by choosing the suburbs, are following the familiar path from city neighborhoods to the urban periphery. In addition, some suburban areas are serving as ports of entry for newly arriving immigrants.").
146. Audrey Singer, The Rise of New Immigrant Gateways, BROOKINGS INST. LIVING CITIES CENSUS SERIES, Feb. 2004, at 1.
147. Id. at 12-15.
148. Glaeser & Shapiro, supra note 91, at 12-13.
149. See, e.g., ROBERT COOTER, THE STRATEGIC CONSTITUTION 36 (2000).
150. Phillip Nelson, Redistribution and the Income of the Median Voter, 98 PUB. CHOICE 187, 188 (1999).
151. See Citizens Budget Commission, Fixing New York State's Fiscal Practices 6 (2003), available at http://www.cbcny.org/fixingnys.pdf. New York City residents pay local taxes approximately 72% higher than the national average, and the City's generous Medicaid payments account for approximately one-quarter of that difference. It is perhaps difficult to explain this significant deviation from the average as an indication of local preference.
152. In theory, it would be possible to address some of these local redistributive needs by collecting redistributive taxes at the central level, but allocating them in accordance with formulas that consider local needs. The combination of central funding and decentralized implementation would simultaneously discourage exit from the redistributive burden and permit response to idiosyncratic local needs. These effects, however, must be balanced against the costs of centrally identifying and satisfying local needs. One would anticipate that the process of collecting data and evaluating competing applications for funding could be so burdensome and error-prone (in part because the process would be susceptible to politicization, especially if the central and decentralized governments were dominated by different political parties) as to offset losses that arise as a result of local emigration to escape the redistributive burden. The central pool would take on many of the features of a commons, since localities would have made payments and would have incentives to overutilize the pool, indifferent to the effects of their use on needier localities.
153. This effect, of course, may be reduced if the redistributive burden is partially financed through commuter taxes or exactions that are largely paid by nonresidents, e.g., hotel surcharges, taxes on parking fees, and meal taxes.
154. The use of pre-commitment devices to withhold exercise of authority is a traditional way in which governments spur economic growth by attracting firms who might otherwise fear exploitation once they have made location-specific investments. See WILLIAM FISCHEL, THE HOMEVOTER HYPOTHESIS 35 (2001);
155. Douglass C. North & Barry R. Weingast, Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth Century England, 49 J. ECON. HIST. 803, 803-04 (1989).
156. This is an example of an "endowment effect," which occurs when individuals value a good more highly when they own it than when they do not own it. See RICHARD H. THALER, QUASI RATIONAL ECONOMICS 8, 28 (1994).
157. For empirical support of the endowment effect, see, e.g., Daniel Kahneman, Jack L. Knetsch & Richard H. Thaler, Experimental Tests of the Endowment Effect and the Coase Theorem, 98 J. POL. ECON. 1325 (1990).
158. This is not to say that endowment effects are infinite, as evidenced by the Boeing Corporation's decision to leave the Seattle area for Chicago. See Boeing Chooses Chicago: Windy City Beats Out Denver and Dallas in Luring Aircraft Maker from Seattle, CNN MONEY, May 10, 2001, http://money.cnn.com/2001/05/10/companies/boeing/index.htm (reporting decision to move Boeing's corporate headquarters from Seattle to Chicago).
159. See, e.g., & FUJITA & THISSE,
160. supra note 81, at 5-9 (2002); Glenn Ellison & Edward L. Glaeser, The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?, 89 AM. ECON. REV. 311, 315-16 (1999).
161. See W. Brian Arthur, Industry Location Patterns and the Importance of History, in INCREASING RETURNS AND PATH DEPENDENCE IN THE ECONOMY 49, at 49-50 (1994).
162. See DREIER ET AL., supra note 50, at 35 (noting presence of 380 specialized geographical clusters in U.S. economy).
163. See Quigley, supra note 80, at 130-32;
164. SAXENIAN, supra note 83, at 5-6.
165. See Andrew F. Haughwout, Infrastructure and Social Welfare in Metropolitan America, 7 FED. RES. BANK N.Y. ECON. POL'Y REV., Dec. 2001, at 1, 5.
166. Edwin Mills reports that "nearly half of the one million jobs located in the city of Chicago are in its CBD [central business district] and 200,000 are located within a mile of the periphery of O'Hare Airport." Edwin S. Mills, Earnings Inequality and Central-City Development, FED. RES. BANK N.Y. ECON. POL'Y REV., Sept. 1999, at 133, 135.
167. See, e.g., Stuart S. Rosenthal & William C. Strange, Geography, Industrial Organization, and Agglomeration, 85 REV. ECON. & STAT. 377, 378 (2003).
168. Glaeser & Kahn, supra note 15, at 119.
169. The locality, however, may be more willing to grant concessions in order to attract residents, including firms, if it is able to externalize some of the costs of compensation. For instance, a locality that issues tax-exempt bonds on behalf of a new firm will not suffer tax collection reductions equal to the benefit conferred on the firm, since the tax-exemption typically provides a subsidy from the state and federal governments, rather than from the locality. The tax-exemption on bonds applies to the interest earned by bondholders. That interest is not included in federal income or state income (where the bond is issued by a locality within the state of the bondholders' residence). Since few cities have income taxes, the subsidy comes from federal and state sources, not from local ones. This may mean that the locality is engaged in socially inefficient behavior, but the ability to externalize costs does, at least, reduce the negative effects that ex ante compensation would otherwise impose on the ability of localities to attract potential subsidizers of redistributive taxes.
170. See, e.g., JAMES M. BUCHANAN & RICHARD A. MUSGRAVE, PUBLIC FINANCE AND PUBLIC CHOICE 179 (2000);
171. Vicki Been, "Exit" as a Constraint on Land Use Exactions: Rethinking the Unconstitutional Conditions Doctrine, 91 COLUM. L. REV. 473, 475-78 (1991).
172. See ALBERT O. HIRSCHMAN, EXIT, VOICE AND LOYALTY (1970).
173. Id. at 23.
174. See, e.g., CLEAN v. State, 928 P.2d 1054, 1056-58 (Wash. 1996) (describing efforts of supporters of football stadium to obtain local funding); DOUGLAS W. RAE, CITY: URBANISM AND ITS END 349-50 (2003) (detailing efforts of neighborhood group to obtain funding from city agency).
175. See Poindexter, supra note 45, at 404-05.
176. For a litany of reasons to interpret local autonomy broadly, see Clayton P. Gillette, Regionalization and Interlocal Bargains, 76 N.Y.U. L. REV. 190, 200-01 (2001).
177. There is some anecdotal evidence of this phenomenon in the experience of New Orleans residents after Hurricane Katrina. Apparently refugees who had been removed to cities that operated more efficiently than New Orleans, and who had never previously questioned New Orleans services, returned to complain about the inferior services that New Orleans had traditionally provided. See Clifford J. Levy, Seeing Life Outside New Orleans Alters Life Inside It, N.Y. TIMES, Nov. 20, 2005 (Week in Review), at 43.
178. See, e.g., 19th Street Assocs, v. N.Y., 593 N.E.2d 265 (N.Y. 1992).
179. The prohibition on special legislation which is found in several state constitutions does have an analogue in federal constitutional equal protection analysis. Indeed, some of the living wage ordinances that have been limited in scope to particular industries have been challenged on federal equal protection grounds. See, e.g., RUI One Corp. v. City of Berkeley, 371 F.3d 1137, 1154-56 (9th Cir. 2004);
180. Visiting Homemaker Serv. of Hudson County v. Bd. of Chosen Freeholders, 883 A.2d 1074, 1081-94 (N.J. Super. Ct. App. Div. 2005). Some federal constitutional clauses, such as the Takings Clause and the Contracts Clause, are perhaps best understood as warding off interest group grabs in the form of raw majoritarianism. See Richard Epstein, Toward a Revitalization of the Contract Clause, 51 U. CHI. L. REV. 703, 716-17 (1984).
181. See, e.g., Frank H. Easterbrook, The Supreme Court, 1983 Term - Foreword: The Court and the Economic System, 98 HARV. L. REV. 4, 15-18 (1984);
182. Cass R. Sunstein, Interpreting Statutes in the Regulatory State, 103 HARV. L. REV. 405, 471, 486-87 (1989).
183. See, e.g., Sunstein, supra note 122, at 471 ("Designed to ensure a kind of deliberative democracy, the constitutional system is hostile to measures that impose burdens or grant benefits merely because of the political power of private groups.").
184. See, e.g., Einer R. Elhauge, Does Interest Group Theory Justify More Intrusive Judicial Review?, 101 YALE L.J. 31 (1991).
185. Compare, e.g., Jonathan R. Macey, Promoting Public-Regarding Legislation Through Statutory Interpretation: An Interest Group Model, 86 COLUM. L. REV. 223, 227 (1986),
186. with William N. Eskridge, Jr., Politics Without Romance: Implications of Public Choice Theory for Statutory Interpretation, 74 VA. L. REV. 275, 279 (1988),
187. and Frank H. Easterbrook, Statutes ' Domains, 50 U. CHI. L. REV. 533, 544 (1983),
188. and JERRY L. MASHAW, GREED, CHAOS, AND GOVERNANCE 81-105 (1997).
189. Id.
190. See, e.g., Helen Hershkoff, State Courts and the "Passive Virtues": Rethinking the Judicial Function, 114 HARV. L. REV. 1833, 1928 (2001);
191. Douglas S. Reed, Popular Constitutionalism: Toward a Theory of State Constitutional Meanings, 30 RUTGERS L.J. 871, 872-74 (1999).
192. Hershkoff, supra note 127, at 1922.
193. Reed, supra note 127, at 887-89.
194. See Stephen Ansolabehere & James M. Snyder, Jr., Party Control of State Government and the Distribution of Public Expenditures (August 2003) (manuscript on file with author) (documenting tendency of state legislatures to allocate expenditures to districts aligned with party in power rather than to swing voter districts);
195. Hershkoff, supra note 127, at 1928.
196. Frequently, this concern is expressed as a function of logrolling, in which broad legislation is enacted because different provisions appeal to different groups, none of which could otherwise command a majority. Thus, the legislation as a whole is viewed as an amalgam of provisions intended to benefit particular groups rather than the enacting jurisdiction as a whole. For anti-logrolling interpretations of these constitutional provisions, see, for example, Advisory Opinion to the Attorney General Re Adoption, 902 So. 2d 763 (Fla. 2005) (single-subject requirement); Sloan v. Wilkins, 608 S.E.2d 579 & n.6 (S.C. 2005) (single-subject requirement); Cuyahoga County Veterans Servs. Comm'n v. State, 823 NE.2d 888, 891 (Ohio App. 2004) (single-subject requirement); Rants v. Vilsack, 684 N.W.2d 193, 201 (Iowa 2004) (line-item veto); Mun. City of S. Bend v. Kimsey, 781 N.E.2d 683 (Ind. 2003).
197. See, e.g., Pennsylvanians Against Gambling Expansion Fund, Inc. v. Commonwealth, 877 A.2d 383, 394 (Pa. 2005) ("An enormous growth in the corporate form of business organization led to significant concentrations of wealth and the corruption of numerous legislators. . . . Corruption took the form of special laws legislation, logrolling, and arbitrary favoritism and was met with a demand for reform. . . . The Constitutional Convention of 1872-73 was convened to reform corrupt legislative behavior, and to this end, the result was the constitutional strictures contained in Article III.
198. See R. BRANNING, PENNSYLVANIA CONSTITUTIONAL DEVELOPMENT 37 (1960). Thus, while these changes to the Constitution originated during a unique time of fear of tyrannical corporate power and legislative corruption, these mandates retain their value even today by placing certain constitutional limitations on the legislative process.").
199. See AMDURSKY & GILLETTE, supra note 41, at 90-96.
200. Indeed, after the Illinois judiciary generated a series of cases that made the legislature the arbiter of whether proposed legislation was invalid as "special," the state constitution was amended to provide explicitly that the question of whether the prohibition had been violated was "a matter for judicial determination." See III. CONST, art. IV, § 13; Best v. Taylor Mach. Works, 689 N.E.2d 1057, 1070 (Ill. 1997); Bridgewaterv. Hotz, 281 N.E.2d 317, 322 (Ill. 1972).
201. See, e.g., Best, 689 N.E.2d at 1069-70 (quoting legislative history of clause as embodying principle that "Governments were not made to make the 'rich richer and the poor poorer,' nor to advance the interest of the few against the many; but that the weak might be protected from the will of the strong; that the poor might enjoy the same rights with the rich"); Vill, of Chatham v. County of Sangamon, 814 N.E.2d 216, 225 (Ill. App. Ct. 2004); Allen v. Woodfield Chevrolet, Inc., 773 N.E.2d 1145 (Ill. App. Ct. 2002); Bd. of Trs. of the Judicial Form Retirement Sys. v. Att'y Gen., 132 S.W.3d 770 (Ky. 2003); World Trade Ctr. Taxing Dist. v. All Taxpayers, 894 So. 2d 1185 (La. Ct. App. 2005); Gillis v. Yount, 748 S.W.2d 357 (Ky. 1988); Lyon v. Burton, 5 P.3d 616, 625 (Utah 2000); Shell v. Metro. Life Co., 181 W. Va. 16 (W. Va. 1989); Soo Line R.R. Co. v. Dep't of Transp., 303 N.W.2d 626, 630 (Wis. 1981).
202. See Town of Telluride v. Lot Thirty-Four Venture, 3 P.3d 30 (Colo. 2000) (invalidating rent control ordinance under home rule grant); Wagner v. Mayor and Mun. Council of City of Newark, 132 A.2d 794 (N.J. 1957) (invalidating rent control under a home rule grant). Rent control in New Jersey was subsequently upheld in Inganamort v. Borrough of Fort Lee, 293 A.2d 720 (N.J. Super. Ct. 1972), aff'd, 303 A.2d 298 (N.J. 1973).
203. A similar reversal occurred under the Florida constitutional home rule provision. Compare City of Miami Beach v. Fleetwood Hotel, Inc., 261 So. 2d 801, 801 (Fla. 1972), with City of Miami Beach v. Forte Towers, Inc. 305 So. 2d 764 (Fla. 1974).
204. See Idaho Bldg. Contractors Ass'n v. City of Coeur d'Alene, 890 P.2d 326 (Idaho 1995) (invalidating impact fees as improper exercise of municipal police powers); E. Diversified Props., Inc. v. Montgomery County, 570 A.2d 850 (Md. 1990) (invalidating impact fees for home rule municipality); Wielepski v. Harford County, 635 A.2d 43 (Md. Ct. Spec. App. 1994), vacated on other grounds, 648 A.2d 192 (Md. 1994) (invalidating impact fees as improper exercise of police powers).
205. See, e.g., New Mexicans for Free Enter, v. City of Santa Fe, 126 P.3d 1149, 1156 (N.M. Ct. App. 2005). In 2005, the New Jersey legislature explicitly permitted political subdivisions to adopt ordinances setting wage rates higher than those established at the state or federal level.
206. See N.J. STAT. ANN. § 34:11-56a4 (West 2005). Thus, the court in Visiting Homemaker Services v. Board of Chosen Freeholders, 883 A.2d 1074 (N.J. Super. Ct. App. Div. 2005), concluded that the issue of state preemption and local authority had been rendered moot while the appeal was pending.
207. This is the standard statement of conflict between state laws and local ordinances. See Miller v. Fabius Twp. Bd., 114 N.W.2d 205 (Mich. 1962).
208. See RUI One Corp. v. City of Berkeley, 371 F.3d 1137, 1172 (9th Cir. 2004) (Bybee, J., dissenting) (quoting Charles B. Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 HARV. L. REV. 692, 693 (1960)).
209. See generally Elhauge, supra note 124 (summarizing arguments to be skeptical of judicial intervention).
210. See discussion supra Part I.A.
211. For Olson, a group was "privileged," in that it could easily organize into an effective lobbying group, if each of its members, or at least one of them, has an incentive to see that the collective good is provided, even if that member must bear the full cost of providing it. See MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION 49-50 (1971).
212. For further analysis of the interplay among different pieces of legislation or different sections of the same legislation, see Clayton P. Gillette, Expropriation and Institutional Design in State and Local Government Law, 80 VA. L. REV. 625, 657-70 (1994) (discussion of single-subject requirements).
213. See, e.g., Robert C. Ellickson, Taming Leviathan: Will the Centralizing Tide of the Twentieth Century Continue into the Twenty-First?, 74 S. CAL. L. REV. 101, 114 (2000);
214. Edward J. Janger, Pre dicting When the Uniform Law Process Will Fail: Article 9, Capture, and the Race-to-the-Bottom, 83 IOWA L. REV. 569, 586 (1998).
215. JERRY MASHAW, GREED, CHAOS, AND GOVERNANCE 94-95 (1997).
216. Recent court decisions have been more receptive to claims that municipal expenditures on behalf of firms satisfy a public purpose. For a review of the history and evidence of that transition in the context of publicly financing sports stadiums, see, for example, Poe v. Hillsborough County, 695 So. 2d 672 (Fla. 1997); Haney v. Dev. Auth. of Bremen, 519 S.E.2d 665 (Ga. 1999); Peacock v. Shinn, 533 S.E.2d 842 (N.C. Ct. App. 2000), appeal dismissed, 546 S.E.2d 110 (N.C. 2000); Ragsdale v. City of Memphis, 70 S.W.3d 56 (Tenn. Ct. App. 2001); Citizens for More Important Things v. King County, 932 P.2d 135 (Wash. 1997); CLEAN v. State, 928 P.2d 1054 (Wash. 1996); Libertarian Party of Wisconsin v. State, 546 N.W.2d 424 (Wis. 1996).
217. See, e.g., WDW Props, v. City of Sumter, 535 S,E.2d 631 (S.C. 2000) (suit by business to prevent subsidy to potential competitor).
218. Glaeser & Kahn, supra note 15, at 119.
219. The U.S. Census Bureau reports the following statistics for the November 1998 selection: Figure Presented
220. U.S. CENSUS BUREAU, VOTING AND REGISTRATION IN THE ELECTION OF NOVEMBER 1998, tbl. 9 (2000), available at http://www.census.gov/population/ socdemo/voting/cps 998/tab09.txt.
221. See Poindexter, supra note 45, at 402-03 (describing church-based community organization lobbying on behalf of working poor).
222. See, e.g., Visiting Homemaker Servs. v. Bd. of Chosen Freeholders, 883 A.2d 1074 (N.J. Super. Ct. App. Div. 2005) (applying living wage ordinance only to industry to which sponsoring union members belonged); Erik Eckholm, City by City, an Antipoverty Group Plants Seeds of Change, N.Y. TIMES, June 26, 2006, at A12.
223. See Robert C. Ellickson, Monitoring the Mayor: Will the New Information Technologies Make Local Officials More Responsible?, 32 URB. LAW. 391, 396 (2000).
224. See, e.g., VINCENT J. CANNATO, THE UNGOVERNABLE CITY: JOHN LINDSAY AND HIS STRUGGLE TO SAVE NEW YORK 136-38 (2001).
225. Reza Baqir, Districting and Government Overspending, 110 J. POL. ECON. 1318 (2002).
226. At least this appears to be the result to the extent that malign redistribution correlates with inefficient expenditures. Robert Inman concludes from earlier studies, which indicate that council-only local governments spend more than local governments with mayors who can constrain excess spending, that each extra dollar of council-only spending generates only 33 cents in net economic benefits. See Robert P. Inman, Financing Cities 26-27 (Nat'l Bureau of Econ. Research, Working Paper No. 11203, 2005), available at http://www.nber.org/papers/w11203.
227. See infra text accompanying notes 157-59;
228. see also Sheryll D. Cashin, Federalism, Welfare Reform, and the Minority Poor: Accounting for the Tyranny of State Majorities, 99 COLUM. L. REV. 552, 625 &n.313 (1999).
229. Andrew Haughwout & Robert P. Inman, Should Suburbs Help Their Central City?, in BROOKINGS-WHARTON PAPERS ON URBAN AFFAIRS, 2002, at 45, 60-62.
230. Caroline Minter Hoxby, How Teachers ' Unions Affect Education Production, 11 Q.J. ECON. 671 (1996).
231. An earlier study, Randall W. Eberts & Joe A. Stone, Teacher Unions and the Productivity of Public Schools, 40 INDUS. & LAB. REL. REV. 354 (1987), found that unionization increased student productivity for average students, but reduced it for significantly above- or below-average students. That study, however, did not consider any additional financial costs related to unionization. Thus, it is more difficult to estimate the optimality of expenditures under that study.
232. See, e.g., Bruno Heyndels & Carine Smolders, Fiscal Illusion at the Local Level: Empirical Evidence for the Flemish Municipalities, 80 PUB. CHOICE 325 (1994);
233. Geoffrey K. Turnbull, The Overspending and Flypaper Effects of Fiscal Illusion: Theory and Empirical Evidence, 44 J. URB. ECON. 1 (1998).
234. New York City's budget for the 2007 Fiscal Year runs 711 pages, with 3975 pages of supporting schedules. The capital budget runs an additional 546 pages. See The City of New York May 2006 Executive Budget, Fiscal Year 2007 Home Page, http://home2.nyc.gov/html/omb/html/finplan05_06.html.
235. Bob Ellickson, for instance, cites to articles in the New Haven Register, a newspaper in New Haven, Connecticut, that disclose continual grants to private organizations that purport to serve low-income residents. See Ellickson, supra note 153, at 396-97 n.8.
236. See, e.g., People ex rel. Korzen v. Brewster, 304 N.E.2d 46 (Ill. App. Ct. 1973).
237. See John C. Jeffries, Jr., Disaggregating Constitutional Torts, 110 YALE L.J. 259, 268-69 (2000).
238. See Daryl J. Levinson, Making Government Pay: Markets, Politics, and the Allocation of Constitutional Costs, 67 U. CHI. L. REV. 345,347-48 (2000).
239. Alberto Alesina, Reza Baqir & William Easterly, Redistributive Public Employment, 48 J. URB. ECON. 219, 220 (2000).
240. Recall that my definition of "benign" does not require that redistribution be efficient or supported by the majority of municipal voters.
241. See Alesina, Baqir & Easterly, supra note 166; Edward L. Glaeser & Andrei Shleifer, The Curley Effect: The Economics of Shaping the Electorate, 21 J.L. ECON. & ORG. 1 (2005).
242. See, e.g., Stephen Coate & Stephen Morris, On the Form of Transfers to Special Interests, 103 J. POL. ECON. 1210 (1995) (arguing that politicians may prefer inefficient redistribution with concealed costs in order to avoid detection where same redistribution could be more efficiently achieved, but only with more transparent subsidy);
243. James A. Robinson & Thierry Verdier, The Political Economy of Clientelism (Center for Econ. Pol. Research, Discussion Paper No. 3205, 2002), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id= 303185.
244. 42 U.S.C. §§ 12101-12112b (2000).
245. See Jeffries, supra note 164, at 268; Julie A. Roin, Reconceptualizing Unfunded Mandates and Other Regulations, 93 Nw. U. L. REV. 351, 353 n.6 (1999).
246. Pennell v. San Jose, 485 U.S. 1, 15-24 (1988) (Scalia, J., concurring in part and dissenting in part).
247. Id. at 22-23 (Scalia, J., concurring in part and dissenting in part) ("The politically attractive feature of regulation is not that it permits wealth transfers to be achieved that could not be achieved otherwise; but rather that it permits them to be achieved 'off budget,' with relative invisibility and thus relative immunity from normal democratic processes. San Jose might, for example, have accomplished something like the result here by simply raising the real estate tax upon rental properties and using the additional revenues thus acquired to pay part of the rents of 'hardship' tenants. It seems to me doubtful, however, whether the citizens of San Jose would allow funds in the municipal treasury, from wherever derived, to be distributed to a family of four with income as high as $ 32,400 a year-the generous maximum necessary to qualify automatically as a 'hardship' tenant under the rental ordinance. The voters might well see other, more pressing, social priorities. And of course what $ 32,400-a-year renters can acquire through spurious 'regulation,' other groups can acquire as well. Once the door is opened it is not unreasonable to expect price regulations requiring private businesses to give special discounts to senior citizens (no matter how affluent), or to students, the handicapped, or war veterans. Subsidies for these groups may well be a good idea, but because of the operation of the Takings Clause our governmental system has required them to be applied, in general, through the process of taxing and spending, where both economic effects and competing priorities are more evident.");
248. see also Dan T. Coenen, A Constitution of Collaboration: Protecting Fundamental Values with Second-Look Rules of Interbranch Dialogue, 42 WM. & MARY L. REV. 1575, 1651 (2001).
249. Saul Levmore, Interstate Exploitation and Judicial Intervention, 69 VA. L. REV. 563, 584 (1983);
250. see also Gillette, supra note 31, at 473-74.
251. Pennell, 485 U.S. at 23.
252. Id.
253. Id. at 22-23.
254. These claims have been forcefully made in the context of unfunded mandates in Roin, supra note 171 (demonstrating that unfunded mandates may be superior to other forms of regulation).
255. This is not to say that any process in which all are represented will necessarily pass muster. If all municipal residents (except landlords) approved the rent control ordinance, I take it that Justice Scalia could still object on the grounds that it constituted a raw majoritarian grab that violated any of a variety of legal constraints, ranging from state uniformity of taxation clauses to the Takings Clause.
256. See Roin, supra note 171, at 357-58.
257. Id. at 358. Employers may be able to pass some of the increased costs to consumers of their goods and services. But unless they can do so costlessly and with certainty, they will continue to bear some of the redistributive burden of regulation.
258. See, e.g., RUSSELL HARDIN, COLLECTIVE ACTION 72-75 (1980).
259. See Visiting Homemaker Servs. v. Bd. of Chosen Freeholders, 883 A.2d 1074, 1077 (N.J. Super. Ct. App. Div. 2005).
260. See One Corp. v. City of Berkeley, 371 F.3d 1137, 1145 (9th Cir. 2004).
261. See Deanna Bellandi, Chicago Council Passes 'Living Wage'Act, WASHINGTONPOST.COM, July 27, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/07/27/AR2006072700197. html.
262. See e.g., Idaho Bldg. Contractors Ass'n v. City of Coeur d'Alene, 890 P.2d 326 (Idaho 1995);
263. New Jersey Builders Ass'n v. Mayor and Twp. Comm. of Bernards Twp., 528 A.2d 555 (N.J. 1987).
264. See supra note 170 and accompanying text.
265. See BERKELEY MUN. CODE § 13.27.070(H) (2006).
266. I thank David Barron for this suggestion.
267. See Sheryll D. Cashin, Localism, Self-interest, and the Tyranny of the Favored Quarter: Addressing the Barriers to New Regionalism, 88 GEO. L.J. 1985 (2000);
268. Gillette, supra note 119.
269. See Kenneth Vanlandingham, Constitutional Municipal Home Rule Since the AMA (NLC) Model, 17 WM. & MARY L. REV. 1 (1975).
270. See Santa Monica City Council Meeting Ordinance 07-10-01, available at http://santamonica.org/cityclerk/Election2002/text_Minwage. htm. The proposal was initially adopted by the City Council, but defeated in a November 2002 referendum.
271. See New Mexicans for Free Enter, v. City of Santa Fe, 126 P.3d 1149, 1156 (N.M. Ct. App. 2005).
272. See, e.g., Ace Rent-A-Car, Inc. v. Indianapolis Airport Auth., 612 N.E.2d 1104 (Ind. Ct. App. 1993) (construing exaction on car rental revenues as a user fee, not a tax);
273. City of New York v. State, 730 N.E.2d 920 (N.Y. 2000) (holding that tax on nonresident commuters was not a "fee" for services provided by the city);
274. Bold Corp. v. County of Lancaster, 801 A.2d 469 (Pa. 2002) (holding that a hotel room rental tax was not invalid where benefits of tax were commensurate with burdens);
275. Cavanaugh v. Town of Narragansett, No. WC 91-0496, 1997 R.I. Super. LEXIS 21 (R.I. Super. Ct. Oct. 10, 1997) (construing higher exaction required of nonresidents for beach access to be a fee, not a tax). The very existence of these cases, of course, reveals that sometimes nonresident litigants can be found who object. That same phenomenon suggests that nonresidents may be virtually represented by residents, such as restaurant owners and garage owners, whose business depends on attracting nonresidents.
276. See, e.g., Howard Chemick & Olesya Tkacheva, The Commuter Tax and the Fiscal Cost of Commuters in New York City, 25 ST. TAX NOTES 451 (2002);
277. R.S. Smith, Are Nonresidents Contributing Their Share to Core City Revenues?, 48 LAND ECON. 240 (1972).
278. See JON ELSTER, LOCAL JUSTICE: HOW INSTITUTIONS ALLOCATE SCARCE GOODS AND NECESSARY BURDENS (1992). For my purposes, local justice involves decisions about allocation of a particular resource at a highly decentralized level, without attention to how the decision in a particular case fits into a more centrally determined decision about allocation of multiple resources, any of which may be traded against another.
279. Nevertheless, the constraints of public purpose requirements have loosened considerably in recent years. See, e.g., Peacock v. Shinn, 533 S.E.2d 842 (N.C. Ct. App. 2000) (upholding payment of "operating expenses" for professional basketball team playing at municipally funded arena);
280. WDW Props, v. City of Sumter, 535 S.E.2d 631 (S.C. 2000) (upholding financing for retail and commercial development);
281. CLEAN v. State, 928 P.2d 1054 (Wash. 1996) (upholding public financing of baseball stadium).
282. THE FEDERALIST NO. 10, at 62-70 (James Madison) (Edward Bourne ed., 1937).
283. See Gillette, supra note 46, at 996-97.
284. See COOTER, supra note 98, at 185-88.
285. I ignore for purposes of this example the difficult issue of what it would mean for the rich and the poor to receive "pro rata" shares of the budget. That is, should the budget be allocated according to tax revenues paid (so that the wealthy receive a greater than per capita share of municipal services) or should the budget be allocated according to need (so that the poor receive a greater than per capita share of municipal services). I assume only that the parties have agreed on the allocation that exists.
286. See, e.g., City of East Orange v. Bd. of Water Comm'rs, 191 A.2d 749, 752-56 (N.J. Super. Ct. App. Div. 1963) (invalidating municipal lease of 151 acres for golf course where rent was nominal and city agreed to pay first $1500 of property taxes).
287. N. Palm Beach County Water Control Dist. v. State, 604 So. 2d 440 (Fla. 1992).
288. See ELSTER, supra note 196, at 189-90.