Having lived and worked in three different states during the past decade, I have had occasion to watch the way local government operates. In particular, I am interested in how state policy influences the goodness or badness of local government.
I start in West Virginia, where I lived a decade ago.
The Mountain State decided in the 1930s to make most budget decisions at the state level. All but a tiny share of property taxes are collected by the legislature and distributed back to local governments using an opaque formula. The legislature, in its munificence, holds about a quarter of total tax revenue in a single large fund it carefully doles out in special earmarks.