Academic journal article The William and Mary Bill of Rights Journal

Welcome to New Columbia: The Fiscal, Economic and Political Consequences of Statehood for D.C

Academic journal article The William and Mary Bill of Rights Journal

Welcome to New Columbia: The Fiscal, Economic and Political Consequences of Statehood for D.C

Article excerpt

Returning from work on a stormy day a few months ago, I was somewhat surprised to find the lampposts on the street covered in D.C. Statehood signs. While such campaigns ebb and flow, this level of full-street coverage was, to say the least, impressive. At that moment, with a whoosh of wind, the banners fell off one of the lampposts and flew down Connecticut Avenue. Independence, you might say, was in the air.

And with good reason, too: the District is booming. Over the past five years, the economic growth of metro D.C. has dramatically outstripped the nation as a whole.1 In 2013, D.C.'s population rose at a faster rate than every state but North Dakota,2 growth that is particularly startling given D.C.'s high housing prices.3 Indeed, at 646,449, its population has come to exceed that of Wyoming and Vermont.4 Given this growth, it is not surprising that there are increased calls for a new political status.

For too long, however, the statehood debate has overwhelmingly focused on the same set of issues: the impact of statehood on the federal government's structure. These issues take a variety of forms-from high-theoretic discussions on the nature of representation to gritty questions of Congressional party power.5 Yet if D.C. did become a state, the most impactful change in its citizens' lives would not be their new ability to elect members of Congress; it would be the dramatic shift in economics and politics that would come with the creation of a new, single-city state government. If we want to know what life will be like in the proposed New Columbia, these changes must be our starting point.6

This Essay sketches some of the long-term economic and political consequences of D.C. statehood. My goal is not to add to the chorus of supporters or opponents of statehood; instead, I aim to flesh out some of the unseen promise and peril that D.C. statehood would bring. On the day New Columbia enters the Union, it would bear a constellation of features unprecedented in the nation: the only state wholly part of one metropolitan region,7 the only state without local governments, and the only wholly urban state. These features, which to date have seldom been considered, have deep implications for the advisability of statehood when compared to the alternatives of retrocession (becoming part of Maryland)8 or the stateless status quo. At the same time, these features also furnish a blueprint for steps to mitigate the risks and exploit the benefits that statehood, if pursued, would offer.

A quick overview: Part I of this Essay will discuss the special fiscal and economic conditions that New Columbia would face. On one hand, statehood would better allow D.C. to take advantage of periods of economic success. In particular, a state of New Columbia would likely be free of the restrictive confines of the Height of Buildings Act, allowing for greater growth when demand for living in D.C. is high.9 Moreover, as has been noted elsewhere, the District would likely also gain greater taxing power (although it would lose some forms of generous federal funding, particularly in its Medicaid program).10 Yet such benefits come at a price: as a single-city state, New Columbia would face drastic risks in times of downturn. The fact that New Columbia would be entirely in one economic region, and the fact that it would exclusively be the center city of that region, would mean almost necessarily that the state would face substantial financial risks in the case of regional and urban-form related shocks.11 Moreover, states frequently redistribute money from successful parts of the state to the unsuccessful to mitigate regional downturns: New Columbia would not have this ability. What's more, in the event of financial catastrophe, New Columbia would also be ineligible for Chapter 9 bankruptcy, insofar as it would be a state and not a municipality.

Such a dynamic understanding of New Columbia's fiscal and economic conditions makes the case for statehood weaker and the case in favor of retrocession to an adjoining state, a status which would allow for the potential for growth while ensuring a fiscal safety net, much stronger. …

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