This is the Cator Daily Podcast for Friday, July 7th,

2003. I'm Caleb Brown. Local governments exist at the pleasure of

states and states exert a wide range of control over how local

governments tax spend and keep the books. North Carolina is adding some teeth

to its requirement that local governments produce audited financial statements

in a timely fashion.

He does Mark Joffi explains the lesson for states and localities elsewhere.

Mark at the state level, how do state governments hold local governments accountable

for, you know, behaving in ways that the state believes that they should we should

we should note local governments exist at the pleasure of the state it really is

all over the map Caleb some states are completely hands off and some really exercise a lot of

oversight over their local governments. North Carolina is an example of a state that

has really taken a very aggressive attitude towards local

government oversight.

And it wasn't always that way.

Before the Great Depression, there were a lot of instances of counties defaulting on their bonds and eventually

the state realized that the way to clean up local government credit was to have

much stronger oversight of local governments.

So what are typical, I don't know, clawbacks or punishments that are doled out when local

governments aren't behaving the way state governments want them to? Well, there are cases. local governments state taking over governments that become fiscally insolvent and you don't you know don't meet certain

criteria that the the state sets and then at that point the local government does not does no longer have fiscal control.

They're usually an appointed manager from the state that that takes over the

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