Strong Municipalities

Many local governments are overwhelmed by challenges and struggling to survive. The impacts of this are broad and deep—our region struggles with disappointing economic performance, steep taxes, poorly maintained infrastructure and high levels of inequality due in part to uneven capacity among local governments.

What is the problem?

Local governments are the foundation for the services that support our lives. The 284 municipalities in the Chicago region have responsibility for infrastructure and many front-line services (e.g., police protection and road maintenance) that residents and businesses count on most. Reduced federal and state funding forces municipalities to rely heavily on local revenue—further exacerbated by Illinois’ severe fiscal problems and the region’s proliferation of special-purpose local governments. Moreover, Chicagoland has suffered a slow recovery from the recession a decade ago, and most municipalities have lower tax revenue today than in 2007.

Some local governments—such as those with highly experienced staff and elected officials, solid tax bases and stable financial conditions—can adapt, raise revenue when needed, cut costs and continue to offer high-quality services. But many local governments cannot take these actions. In these places, residents and businesses face higher tax rates and lower-quality services, which perpetuate a cycle of disinvestment.

Why is MPC focusing on improving municipal capacity?

As an independent, nonpartisan organization, MPC develops, promotes and implements solutions for sound regional growth. MPC works with government, grassroots and private sector partners across housing, transportation, land use, water resources, community development and finance challenges. MPC is actively involved in efficient government efforts through Transform Illinois and through collaborative approaches to housing, code enforcement and drinking water supply.

In partnership with the Chicago Metropolitan Agency for Planning (CMAP), and with funding support from the Chicago Community Trust, MPC released a strategy paper in fall 2017 that lays out potential solutions to the problem of inadequate municipal capacity. Now, MPC is intensifying its commitment to tackle the broad challenge of building local government capacity. MPC’s unique position at the intersection of the public, private and civic sectors—with access to experts in engineering, law, finance and public policy—provides the breadth of perspectives and relationships that this complex issue requires.

What are proposed solutions?

The joint MPC-CMAP strategy paper describes multiple stressors to local government capacity and lays out potential solutions. Recognizing each community’s diverse characteristics and goals, it offers strategies that can be tailored to meet individual municipal needs, rather than one-size-fits-all actions.

During 2018, MPC will work with its partners, including CMAP and the Metropolitan Mayors Caucus, to respond to these needs. With advice and guidance from MPC leaders, potential funders, pro bono service providers and local governments, MPC is scoping out a capacity-building program that will identify the types of assistance most needed, mechanisms to deliver assistance, roles of partners, near-term funding sources, and long-term revenue sources including impact investors. MPC will launch its expanded effort in fall 2018, complementing the adoption of CMAP’s ON TO 2050 plan.

Examples of solutions could include:

• Shared services across local governments can save money, reduce inefficiencies and improve service quality—but negotiating complex shared service agreements is beyond the abilities of many cash-strapped communities. MPC can help local governments build trust with their neighbors and provide advice on the thorny details of intergovernmental agreements, helping avoid duplicative legal expenses.
• Capital improvement plans (five-year plans for infrastructure investment) are basic documents that every municipality should have, but one-third do not. MPC can connect local governments to financial, engineering and public works expertise to build their capacity to evaluate infrastructure condition, project future revenues and costs, and make smart investment decisions.
• Municipalities are responsible for regulating land use, but are often overwhelmed when working with real estate developers. MPC can prepare local governments to interact professionally with developers, engage residents effectively and analyze long-term fiscal and economic impacts.

What are longer-term outcomes?

Longer term outcomes could include:

• Job creation and housing production in lower-income municipalities, spurred by a more predictable permitting and development review process.
• Reduced drinking water loss and avoidance of flooding damage due to better planning for drinking water and stormwater management.
• Immediate cost savings from service sharing, more efficient administrative processes, or even consolidation, leading to lower tax rates.
• Higher voter participation in local elections resulting from greater awareness of municipal activities.
• A better economic climate, caused by all of the other outcomes noted above.

Insufficient capacity at our local governments is a fundamental challenge that affects our entire state. Directly addressing this problem will advance MPC’s priorities in all of our issue areas—improving our economy, reducing flooding, providing quality housing, investing in our infrastructure and more.