One of the underlying currents of the recent discussions around health care is the role of the federal government. I thought it would be interesting to see how much is spent per person by our local, state and federal governments. I took the budgets for the City of Bellingham, Washington State and the federal government and converted them to a per person basis, then broke them out into categories (when information was available). The results of that analysis are in the above graph. Combined, all governments spend about $21,000 for every person in their jurisdiction, with the federal government, in large measure, controlling about 61% of the funds (arguably there are some funds like education that are a pass-through to local governments). The question becomes whether there would be a different total if the pyramid were reversed and local governments controlled the majority of government spending with the states controlling about the same amount they do now. Would this dramatically reduce federal costs?

In looking at the details, three obvious areas jump out where money could be collected and controlled locally for potentially better results. The three areas are social services, housing/commerce, and the environment. In all three cases, almost all the funds are controlled by the federal government with very little influence from local governments. The second table (see below) shows what sort of impact that would have on spending per person. In this scenario, decisions around health care and other social service programs would be decided at the local level, not at the national level. The reality is, all of these are actually local issues and better solved by local people and organizations. Currently, the funding mechanism is complicated and controversial; localizing this would put the money and control where it would better serve individuals. In the case of the environment, the standards would be set nationally, but enforcement authority and the ability to exceed the national standards would be controlled locally, as would funds to clean up existing environmental problems.

It is easy to confuse those who set the standards with those who have the responsibility and funds to meet the standards. In many cases they are both done by the federal government, but in most cases they are also done ineffectively. The other solution is to let the federal government set the standards, but then allow each community to figure out how to utilize their resources to meet those standards. This would allow more innovation, more local input, smaller organizations (less bureaucratic), and better results.

Obviously, the answers are not as easy as I am trying to portray in this blog, but eventually it is the conversation we need to have if we really want to solve our problems. Power needs to be in the communities, and it resides with those who control government spending. It is time to reverse the tide of power flowing up to the federal government and push power and responsibility back into local communities.