Examining the Conflict Between Municipal Receivership and Local Autonomy

This Note seeks to examine the relationship between municipal receivership and local autonomy. Because few have explored this relationship in great detail, it is unclear whether municipal receivership is an appropriate tool for economically struggling cities. This Note argues that it is not. I begin by examining both the history of municipal receivership and local government law. This is necessary because local government law provides the framework for how to think about municipal receivership. I then analyze some of the legal arguments against municipal receivership. Based on specific home rule provisions in state constitutions, as well as a reading of the history of the home rule movement, I argue that home rule should provide cities with some protection against municipal receivership. Additionally, federal law may also be able to protect some cities from the loss of local voting rights that municipal receivership entails.

This Note then transitions into an evaluation of the extralegal arguments against municipal receivership. This reveals that municipal receivership is problematic because of the effect it has on democratic governance and the political incentives of local residents. Moreover, by defining success narrowly and misunderstanding how local financial crises arise, I argue that municipal receivership represents bad policy in that it fails to provide a long-term solution for the causes that generated the fiscal instability in the first place. This Note concludes with a review of some alternatives to municipal receivership, and discusses why they are superior.