A standard progressive complaint about K-12 education policy is that reliance on local property tax revenue creates an inequitable situation where the poorest communities have the smallest budget to hire teachers. This is, in practice, pretty outdated. States have changed their funding formulas significantly, so the biggest gaps these days are between high-spending and low-spending states, not between rich communities and poor communities within a particular state.
One area where things really do work that way, though, is policing.
Criminal law is mostly written by state legislatures, who decide which activities are crimes and what the rules of procedure in their court system will be. States set sentencing guidelines, and states run prisons. But actually enforcing the law is left up to county sheriff’s departments and the local police departments of incorporated towns or cities. This setup even allows for things like private police departments, often run by universities, which can have full powers of arrest. There are strengths and weaknesses to this model of localism, but the upshot is that policing resources are allocated largely by ability to pay rather than by any effort to assess actual policing needs. This raises fairness concerns, but also real questions of crowding out.
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