Title: Comments: An Analysis of Authorities: Traditional and Multicounty
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Title: Comments: An Analysis of Authorities: Traditional and Multicounty
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COMMENTS

An Analysis of Authorities: Traditional and Multicounty

I. INTRODUCTION

The ills that plague American metropolitan centers are all too
familiar. Not least among them are the over-burdened system of fi-
nancing municipal services1 and the lack of coordination of the
services provided by the multitude of local governments that make up
urban areas.2 It is thus surprising that little attention has been paid
to recent developments concerning public authorities, autonomous
government entities created for the solution of a single problem and
primarily financed, not through new taxes, but through private in-
vestment in revenue bonds.8
For years state and local governments have used the authority
device to provide revenue-generating services. Among the reasons for
the popularity of authorities have been their ability to finance capital
facilities without increasing taxes or violating state debt restrictions
on local governments and the belief that they operate more efficiently

1. Bond issues and school levies have been defeated with increasing frequency
across the nation as part of a so-called "taxpayers' revolt." It has been estimated that
up to one half of all bond issues proposed in the November 1970 congressional elec-
tions were defeated. U.S. NEWS & WORLD REP., Nov. 16, 1970, at 60. See also Bradford,
Malt & Oates, The Rising Cost of Local Public Services: Some Evidence and Reflections,
22 NATL. TAX J. 185 (1969); Wall St. J., May 11, 1970, at 1, col. 1. Nationwide
attention has also been focused on demands for property tax reform. See, e.g., Januta,
Municipal Revenue Crisis: California Problems and Possibilities, 56 CALIF. L. REV.
1525 (1968); Stickney, Coming of Age in America: The Need for Property Tax Reform,
21 AD. L REv. 325 (1969); Tideman, Fractional Assessments-Do Our Courts Sanction
Inequality?, 16 HASTINGS L.J. 573 (1965). See generally D. NETZER, ECONOMICS OP THE
PROPERTY TAX (1966); Gaffney, What is Property Tax Reform?, 31 AM. J. EcoN. &
SocloL. 139 (1972). And revenue sharing plans have been suggested to alleviate the
cities' financial plight. See, e.g., State and Local Fiscal Assistance Act of 1972, Pub.
L. No. 92-512, 86 Stat. 919 (codified at 31 U.S.C. 1221-63 (Supp. II 1973)); S. Rep.
No. 92-1050, 92d Cong., 2d Sess. (1972). See generally W. HIRSCH, P. VINCENT, H.
TERRELL, D. SOUP & A. ROsErr, FISCAL PRESSURES ON THE CENTRAL CITY (1971); Colman,
Revenue Sharing: Problems and Prospects, 1 URBAN LAW. 34 (1969); The Controversy
Over Revenue Sharing, 50 CONG. DIG. 99 (1971).
2. See, e.g., U.S. ADVISORY COMMON. ON INTERGOVERNMENTAL RELATIONS, ALTERNATIVE
APPROACHES TO GOVERNMENTAL REORGANIZATION IN METROPOLITAN AREAS 8-10 (1962)
(fragmentation of governmental units, failure to achieve coordination and economies of
scale): US. ADVISORY COMMON. ON INTER GOVERNMENTAL RELATIONS, METROPOLITAN AMERICA:
CHALLENGE TO FEDERALISM 36-37 (1961) (failure to achieve economies of scale, frag-
mentation of governmental units in provision of utilities) [hereinafter METROPOLITAN
AMERICA].
3. The most complete general discussion of the recent growth of urban multi-
count authoritis is in R SMITH. Punuc AUTHORITIES IN RBAI AREAS 90fi9 hereinafter
URBAN AREAS]. For other recent works providing background information about
authorities, see R. SMITH, PUBLIC AUTHORITIES, SPECIAL DISTRICTS AND LOCAL GOVERN-
MENT (1964) [hereinafter PUBLIC AUTHORITIES]; Quirk & Wein, A Short Constitutional
History of Entities Commonly Known as Authorities, 56 CORNELL L. REV. 521 (1971);
Symposium on Public Authorities, 26 LAw & CONTEMP. PROB. 589 (1961).
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Comments


than other governmental bodies because of their corporate structure
and powers. In recent years, however, the jurisdictional flexibility of
authorities, which allows them to be superimposed upon a given area
without regard to existing city and county boundaries, has become
increasingly important in decisions to create them. As a result, a new
wave of powerful multicounty authorities has been generated
throughout the country, as evidenced by such bodies as the New York
Metropolitan Transportation Authority,4 the Massachusetts Bay
Transportation Authority,6 the San Francisco Bay Area Rapid Tran-
sit District,6 and the New York State Environmental Facilities Cor-
poration.7
This Comment will briefly define and describe authorities in gen-
eral,8 as well as the new multicounty authorities. Their legal status
and practical advantages and disadvantages will be explored. Finally,
an attempt will be made to isolate the uses to which multicounty
authorities can most profitably be put in light of the conflicting goals
of maximum governmental efficiency and public accountability.

II. PUBLIC AUTHORITIES: BACKGROUND
A. Definition and Description
Authorities are one of several types of governmental units that,
unlike more traditional governmental bodies, are assigned a single
responsibility. Single-purpose units can be divided into two catego-
ries: (1) agencies, bureaus, boards, and commissions, which are merely
branches of such general-purpose governments as cities, counties, and
states; and (2) special governments, which include special districts
and public authorities. Special governments are characterized by
corporate organization, financial and operational independence, and
jurisdictional flexibility. Within this category, different methods of
financing distinguish public authorities from special districts.9 Spe-
4. See N.Y. PUB. AUTH. LAW 1260-78 (McKinney 1970), as amended, N.Y. PUB.
Atur. LAw 1263-76-a (McKinney Supp. 1972).
5. See MASS. ANN. LAWS ch. 161A, 1-29 (1970).
6. See CAL. PUB. UTIL. CODE 28500-9757 (West 1965), as amended, CAL. PUB. UTU..
CODE 1 28700-959 (West Supp. 1973).
7. See N.Y. PUB. AUTH. LAW 1280-98 (McKinney Supp. 1972).
8. Authorities remain perhaps the least known and understood of all governmental
units. One commentator characterized "special districts"-defined in a way that
includes many of the authorities with which this Comment is concerned-as "the
'new dark continent of American politics,' a phrase applied earlier in the century to
counties." J. BOLLENS, SPECIAL DISTRICT GOVERNMENTS IN THE UNITED STATES 1 (1957).
See also PUBLIC AUTHORrITIE, supra note 3, at ix, 4-6.
9. See COUNCIL OF STATE GOVERNMENTS, PUBLIC AUTHORITIES IN THE STATES 5-6 (1953)
[hereinafter COUNCIL REPORT]; URBAN AREAS, supra note 3, at 246; Edelstein. The
Authority Plan-Tool of Modern Government, 28 CORNELL L.Q. 177, 177 n.l (1943);
Gerwig, Public Authorities in the United States, 26 LAw & CONTEMP. PROB. 591, 591
(1961); Nehemkis, The Public Authority: Some Legal and Practical Aspects, 47 YALE


r" -- .


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cial districts are backed by the taxing power of the creating state or
local government; they are financed through current tax revenues
or through general obligation bonds that pledge future tax revenues.
Apart from school districts, which outnumber all the other kinds
combined,10 the most common kinds of special districts are soil con-
servation, drainage, fire protection, housing and urban renewal,
water supply, cemetery, and sewerage districts." Public authorities,
on the other hand, operate primarily through the sale of revenue
bonds that are not backed by taxes.'2 A typical authority constructs
and operates a revenue-producing facility and pays its bondholders
with self-generated revenue. Authorities are most frequently used in
areas of traditional state responsibility, such as providing transporta-
tion (including port and terminal facilities, highways, bridges, tun-
nels, ferries, and transit systems), operating public buildings (includ-
ing schools, dormitories, courthouses, and administrative offices), and
constructing dams, airports, and hospitals. Yet, they have also been
used to operate pollution control facilities,13 parking facilities, recre-
ational facilities, garbage disposal plants, steam heating systems, in-
dustrial exhibits, municipal theaters, war memorials, planetariums,
and mineral springs.14
The numerical growth of special governments is an indication of
their increasing importance in state and municipal government.
Their number has increased from 8,299 in 1942 to 21,264 in 1967.15
The statistics do not distinguish between special districts and authori-

L.J. 14, 14 & n.l (1937); Shestack, The Public Authority, 105 U. PA. L REv. 553, 555
(1957).
10 U.S. BUREAU OF THE CENSUS, DEPT. OF COMMERCE, 1967 CENSUS OF GOVERNMENTS,
VOL. 1: GOVERNMENTAL ORGANIZATION 1 (1968) [hereinafter GOVERNMENTAL ORGANIZA-
TION].
11. Id. at 5.
12. URBAN AREAS, supra note 3, at 246. It must be noted that there is not universal
agreement on this distinction. See, e.g., J. BOLLENS, supra note 8; GOVERNMENTAL
ORGANIZATION, supra note 10, at 14 (possession of taxing power "noncritical" to defini-
tion of "special district," no distinction made between special districts and public
authorities); U.S. ADVISORY COMMON. ON INTERGOVERNMENTAL RELATIONS, THE PROBLEM
OF SPECIAL DISTRICTS IN AMERICAN GOVERNMENT 1 (1964). A vast semantic problem is
also created by the various state systems of nomenclature, which use such terms as
"authorities," "districts," "public corporations," "commissions." and "agencies," seem-
ingly without regard to the actual characteristics of their creations. Gerwig, supra note
9, at 592-94. Sec also Novak, Legal Classification of Special District Corporate Forms in
Colorado, 45 DENVER L.J. 347 (1968).
13. N.Y. PUB. AUTH. LAW 1280-98 (McKinney Supp. 1972). For a description of
this authority, see text accompanying notes 153-64 infra.
14. Gerwig, supra note 9, at 597.
15. GOVERNMENTAL ORGANIZATION, supra note 10, at 23. The same figures show that
"special districts," which by Census Bureau definition include authorities, increased
in number 16.1 per cent between 1962 and 1967, while the next greatest percentage
increase was only .3 per cent, for municipalities. Id.


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ties,t1 but almost half of the special-purpose units lack the power to
levy property taxes."
The amount of outstanding debt of special governments is a rough
measure of the number and size of the capital facilities that they
finance and operate. The total debt outstanding of special govern-
ments in 1966-67 was 17.2 billion dollars, more than twice the total
debt of county governments and about one fifth of the total debt of all
local governments.18 Individual special governments, however, vary
greatly in size and importance. Ninety per cent of the special govern-
ments had outstanding debts of less than 1 million dollars.19 The fact
that there are twenty-five districts and authorities with debt greater
than 100 million dollars, including the Port of New York Authority
with expenditures of 210 million dollars and debt of 845 million
dollars,20 indicates that financial power is concentrated in a few large
units.21 These are found, as would be expected, in areas of dense pop-
ulation; although only about one third of all the special districts and
authorities are within Standard Metropolitan Statistical Areas,22 most
of the large special governments, which deal with transit, housing,
water and sewerage, and port facilities, are found in urban areas.23
One of the most important aspects of special governments is the
fact that their jurisdiction can be defined to fit a particular need with-
out regard to existing city or county boundaries. Thus, a water sup-
ply district or transit authority may be superimposed upon the grid
of city limits and county lines, its shape dictated only by the dimen-
sions of the problem to be solved. This unique characteristic has not
been taken advantage of as frequently as might be expected. The vast
majority of special districts and authorities are located entirely within
one county, and nearly one fourth have the same boundaries as some

16. Id. at 14.
17. Id. at 12.
18. US. BUREAU OF THE CENSUS, DEPT. OF COMMERCE, 1967 CENSUS OF GOVERNMENTS,
VOL. 4, No. 2: FINANCES OF SPECIAL DISTRICTS 3 (1968) [hereinafter FINANCES OF SPE-
CIAL Dls'rucrs]. About 13.2 billion dollars of the debt was unsecured and not "full
faith and credit" debt. Id.
19. GOVERNMENTAL ORGANIZATION, supra note 10, at 5.
20. FINANCES OF SPECIAL DISTRICTS, supra note 18, at 4.
21. Altogether, the 25 largest (out of 21,264) special governments account for more
than one fourth of the national totals of special-government revenue, expenditure, and
indebtedness. In addition, only 12 state governments had a larger amount of debt out-
standing than the Port of New York Authority. Id.
22. Standard Metropolitan Statistical Areas, defined by the US. Bureau of the
Budget, generally consist of a single county or a group of contiguous counties that
includes at least one central city of at least 50,000 inhabitants. In 1967, there were
227 SMSAs, within hichi nearly two thirds of the country's population resided. GOVERN-
MENTAL ORGANIZATION, supra note 10, at 10.
23. FINANCES OF SPECIAL DISTRICTS, supra note 18, at 3-4.


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unit of general government. However, in 1967, there were some 2,300
special governments extending into two or more counties.2'

B. Creation, Organization, and Termination
Authorities usually originate in one of three ways,25 pursuant to a
state's power to provide for the creation of local governmental en-
tities: (1) through special act of the state legislature;26 (2) through a
general act allowing counties and municipalities, singly or together,
to create authorities;27 or (3) through a general act enabling the elec-
torate of a defined region to approve their creation.28 Although usu-
ally less visible, authorities created by cities and counties under en-
abling acts have much the same legal structure and status as the
larger authorities created directly by the state.29
As with any statutorily created body, a given authority's structure
and powers can only be understood by reference to the specific leg-
islation creating it. Nevertheless, some generalizations as to organi-
zation and management are possible. Most authorities follow a cor-
porate pattern and are governed by a board of commissioners or
directors, who are generally not paid a salary.30 Directors are likely to
be middle-class businessmen or professionals.31 On the whole, there
are more elected than appointed officials directing special govern-
24; GOVERNMENTAL ORGANIZATION, supra note 10, at 5-6. An authority that extends
into two or more counties is not necessarily a "multicounty authority" as the term
is used in this Comment. The multicounty authorities discussed herein have jurisdic-
tion over the entire area of two or more counties.
25. COUNCIL REPORT, supra note 9, at 38-39, also mentions creation by the state
executive pursuant to legislative authorization, a fourth method that is rarely en-
countered.
26. See, e.g., N.Y. PUB. AUTH. LAW 1-3002 (McKinney 1970), as amended, N.Y.
PuB. AUTH. LAW 102-a to 2602 (McKinney Supp. 1972).
27. See, e.g., PA. STAT. ANN. tit. 16, 12601 (Supp. 1973): "In each county of the
second and second A class of this Commonwealth, there is hereby created a body
corporate and politic to be known as the 'Authority' of said county ... .provided, how-
ever, that such 'Authority' shall not become operative nor transact any business until
and unless the board of county commissioners .shall declare its creation, and
appoint and designate the members thereof, as in this act herein prescribed." For
similar authorization to cities, see PA. STAT. ANN. tit. 53, 303 (1957). See also MICH.
COMP. LAws ANN. 124.352 (Supp. 1973) (allowing the creation of mass transportation
authorities by cities with populations of not more than 300,000); MICH. COMP. LAWS
ANN. 124.404 (Supp. 1973) (permitting one or more counties in major metropolitan
areas to create regional transportation authorities).
28. See, e.g., WASH. REV. CODE ANN. 35.58.030 (1965), which authorizes two or
more cities, at least one of which is a "city of the first class," to organize metropolitan
municipal corporations following voter approval. An election may be called by a resolu-
tion of (1) the city council of a central city or the board of commissioners of a central
county, or (2) the city councils of two or more of the noncentral component cities. Al-
ternately, an election may be called by petition of four per cent of the registered voters
within the metropolitan area. WASH. REv. CODE ANN. 35.58.070 (1965).
29. See Gerwig, supra note 9, at 599.
30. COUNCIL REPORT, supra note 9, at 40-44, 47; Gerwig, supra note 9, at 601.
31. PUBLIC AUTHORITIEs, supra note 3, at 57-64.


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June 1973] Comments 1381

ments,32 but the more important authorities are usually governed by
appointed directors.3 Occasionally, directors are appointed exclu-
sively by the governor.34 In other authorities, some directors are ap-
pointed by the governor and others by local mayors.85 However, when
a measure of localism is desired, the Dower to appoint or to approve
the appointment of authority directnrg i nften recprved to the gv-
erning bodies of the affected cities and counties.30
An authority is given a number of corporate powers in order to
carry out its purposes. New York authorities, for example, are almost
invariably allowed to sue and be sued, to have a seal, to borrow
money and issue negotiable notes and bonds, and to make bylaws
for internal management.37 Also, the control given an authority over
a revenue-producing project usually explicitly includes the power to
set rates for the service.38
Certain governmental powers, such as eminent domain,39 the sub-
poena power,40 and the power to establish a police force,41 may also be
explicitly given to an authority if necessary to the accomplishment
of its goals. In addition to these powers specifically designated by
statute, authorities may also possess ancillary powers, which may be
derived from a "necessary and proper" clause in the legislation42

32. US. BUREAU OF THE CENSUS, DEPT. OF COMMERCE, 1967 CENSUS OF GOVERNMENTS,
VoL. 6, No. 1: POPULARLY ELECTED OFFICIALS OF STATE AND LOCAL GOVERNMENTS 4
(1968).
33. E.g., N.Y. UNCONSOL. LAWS J 6405 (McKinney 1961) (Port of New York Au-
thority); N.Y. PUB. AUTH. LAW 1263 (McKinney 1970) (New York Metropolitan
Transportation Authority); MASs. ANN. LAWS ch. 161A, 6 (1970) (Massachusetts Bay
Transportation Authority).
34. E.g., MASS. ANN. LAWS ch. 161A, 6 (1970) (Massachusetts Bay Transportation
Authority). Dearing, Turnpike Authorities in the United States, 26 LAw & CONTEMP.
PROB. 741, 745 (1961), observes that in the case of turnpike authorities the appointive
power almost always resides solely in the governor.
35. E.g., ILL. ANN. STAT. ch. 111-2/3, 320 (1966) (Chicago Transit Authority).
36. E.g.. CAL. PUB. UTIL. CODE 28701, 28733 (West Supp. 1973) (San Francisco
Bay Area Rapid Transit District); N.Y. PUB. AUTH. LAW 1053 (McKinney 1970) (Erie
County Water Authority). See Tobin, The Legal and Governmental Status of the
Metropolitan Special District, 13 U. MIAMI L REV. 129, 148 (1958), for examples of
special districts with city or county officials as ex officio directors, another concession
to localism.
37. See, e.g., N.Y. PUB. AUTH. LAW 553, 578, 1054, 1204, 1265, 1299-e (McKinney
1970), as amended, N.Y. AUTH. LAw 1054, 1204, 1265 (McKinney Supp. 1972).
38. See, e.g., text accompanying notes 103 & 141 infra.
39. For examples of authorities with the power of eminent domain, see CAL. STs.
& HWYS. CODE 30403 (West 1969) (California Toll Bridge Authority); CAL. PUB. UTIL.
CODE 29010 (West 1965) (San Francisco Bay Area Rapid Transit District). See also
Gerwig, supra note 9, at 601; Tobin, supra note 36, at 149.
40. E.g., N.Y. Pun. AUTH. LAw 1265(12) (McKinney 1970) (New York Metropolitan
Transportation Authority); N.Y. PI'u. AUTH. LAW 1006 (McKinney 1970) (Power
Authority of the State of New York).
41. E.g., N.J. SrAT. ANN. 32:2-25 (1963) (Port of New York Authority in New Jer-
sey); MAss. ANN. LAws ch. 117, 10D (1972) (Mass iclhusetts Turnpike Authority).
42. E.g., MICH. COMP. L\ws ANN. 124.406(i) (Supp. 1973) (Southeastern Michigan
Transportation Authority); N.Y. PUB. AUTh. LAW 1054(18) (Erie County Water










Michigan Law Review


or may be implied by a court.43
There is little control or supervision by the parent government
over the means by which an authority carries out its functions.44 Be-
cause they are independently financed, authorities need not submit
appropriations requests to be examined as part of a general govern-
ment's yearly budget review. As one commentator summarizes, "In a
very practical sense they are the most autonomous units of gov-
ernment in the country.""4
Authorities were originally seen as temporary entities, which were
to fulfill a specific purpose, pay off their bondholders, turn their prop-
erty over to the state or city, and then dissolve.4" This pattern is some-
times followed in small authorities, but the virtual permanence of
larger authorities is now taken for granted.47 Authorities are now re-
sponsible for projects whose cost and size require long-range plan-
ning, and they usually issue long-term bonds. Moreover, authorities
in metropolitan areas are almost inevitably caught up in plans for
additional capital construction, supplementary facilities, or improve-
ments. Since the legislation creating many authorities pledges to the
bondholders that the state will not alter the rights of the authority to
collect revenues until all debts and the interest thereon are paid,48
each new issue of bonds for expansion that extends the final maturity
date also extends the projected date of the termination of the au-
thority.49
Authority), 1265(14) (New York Metropolitan Transportation Authority) (McKinney
1970).
43. See California Toll Bridge Authority v. Kuchel, 40 Cal. 2d 43, 53, 251 P.2d 4,
9 (1952) (authority has only such additional powers as are necessary for the efficient
administration of powers expressly granted, or such as may be fairly implied).
44. See COUNCIL REPORT, supra note 9, at 41. See also PUBLIC AUTHORITIES, supra note
3, at 53-57.
45. PUBLIC AUTHORITIEs, supra note 3, at 55.
46. The language found in many of the New York statutes creating authorities
expresses this idea. For example, the statute creating the Nassau County Bridge
Authority reads: "Such board and its corporate existence shall continue only for a
period of fifteen years, and thereafter until all its liabilities have been met and its
bonds have been paid in full or such liabilities or bonds have otherwise been dis-
charged. Upon its ceasing to exist, all its rights and properties shall pass to the
county of Nassau." N.Y. PuB. ArTH. LAw 653 (McKinney 1970). See also N.Y. PUB.
AUTH. LAW 1402 (McKinney 1970) (Amsterdam Parking Authority).
47. See generally URBAN AREAS, supra. note 3, at 1-48.
48. E.g., N.Y. PUB. AUTH. LAW 830, 1060, 1188, 1271, 1299-k (McKinney 1970).
49. The legislation creating the Triborough Bridge and Tunnel Authority explicitly
authorizes the continuation of the Authority's control over all its projects as long as
any liabilities are outstanding, despite the fact that a particular project's bonds may
have been paid off. N.Y. Pun. AUTH. LAw 552(2) (McKinney 1970). See also URBAN
AREAs, supra note 3, at 22: "It now is obvious that these agencies are not going to
disappear from the scene of local government. They are units of government that
must be worked into the fabric of American federalism."


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C. Tax Exemption
Authorities, like other governmental units, enjoy tax exemption,
which facilitates their operation in two ways. First, the intereste-
ceived by investors on authority bonds is exempt from local, state,
and federal income tax, which presumably renders the bond issues
attractive to investors and thus makes possible the financing of public
services at an interest cost lower than that which a profit-making cor-
poration would have to pay. Second, authorities themselves are ex-
empt from income taxes on their operating profit and from local
property taxes, thus avoiding the anomaly of one branch of govern-
ment taxing another branch.
The Internal Revenue Code provides that, generally, gross in-
come does not include interest on the obligation of a state, or of any
political subdivision of a state.50 A political subdivision is defined in
the regulations to include any division of a state "to which has been
delegated the right to exercise part of the sovereign power of the
State. .... ."1 In Commissioner v. Shamberg's Estate,52 a case involv-
ing the taxability of the interest on bonds issued by the Port of New
York Authority, the second circuit court of appeals found that the
Port Authority was a "political subdivision" even though it lacked
the power to tax because its activities were carried on for a "public
purpose":
Here the activities, even though some of them might have been ex-
ercised by private corporations under appropriate legislation, are
exercised for a public purpose by an agency set up by the states and
given many public powers, though not of taxation or control through
the suffrages of citizens. It minimizes its public and political char-
acter to treat such an agency as a private corporation merely because
of the lack of taxing power which is only one of the attributes of
sovereignty."3

The same court expressed much the same view in Commissioner v.
White's Estate,54 where it held that interest on the bonds of the Tri-

50. INT. REV. CODE OF 1954 103(a)(l).
51. Treas. Reg. 1.103-1 (1956).
52. 144 F.2d 998 (1944), cert. denied, 323 U.S. 792 (1945). The "political subdivision"
language in the Internal Revenue Code of 1954 is similar to that in the 1938 Act.
Compare INT. REV. CODE OF 1954 103(a)(l) with Revenue Act of 1938, ch. 289, 22(b)
(4)(A), 52 Stat. 458.
53. 144 F.2d at 1005.
54. 144 F.2d 1019 (2d Cir. 1944), cert. denied, 323 U.S. 792 (1945). Accord, Wolk-
stein v. Port of New York Authority, 178 F. Supp. 209 (D.N.J. 1959). See also United
States v. Washington Toll Bridge Authority, 190 F. Supp. 95 (W.D. Wash. 1960), in
which it was held that the Authority, as an agency of the state, was not subject to
federal transportation taxes despite the fact that it took over a ferry system that had
been previously operated as a private business.


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1384 Michigan Law Review [VoL 71:1376

borough Bridge Authority was not subject to income tax, notwith-
standing the fact that the bonds were the obligation of the Authority
only and not of New York City. Since the issue has not been raised
again, these cases appear to have settled the matter of federal income
tax on authority bond interest. States follow the federal government
in not taxing the income from these bonds,65 and most authority-
creating legislation now pledges to bondholders that the bonds and
notes, the income therefrom, and the fares and revenues pledged to
secure the bonds will be free from taxation.56
Since authorities are state created or authorized instrumentalities,
they are not likely to be subjected to state and local property taxes;
some statutes expressly exempt them.57 In Bush Terminal Co. v. City
of New York,56 the plaintiffs sought to restrain the Port of New York
Authority and the city from entering into a statutorily authorized
contract for payments in lieu of the significantly greater regular prop-
erty taxes.59 Despite the absence of an express provision in the statute
exempting authorities from local property taxes, the court found the
property immune under the general rule that property held by a state
agency is immune from taxation when used for a public, rather than
a profit-making, purpose.60 The immunity was not lost merely be-
cause the agency incidentally derived income from the property.
It is possible, however, that there will be increased pressure to tax
authority property as it becomes known that authorities are increas-
ingly involved in "proprietary" enterprises that may generate substan-
tial surplusese8 and that they hold a great deal of valuable metropoli-
tan property that would be taxed if owned by a private corporation.

55. At least three courts have discussed whether the income of authorities and the
interest income of their bondholders can be exempted from taxation under their
state constitutions. Orbison v. Welch, 242 Ind. 385, 179 N.E.2d 727 (1962); Opinion of
the Justices, 334 Mass. 721, 136 N.E.2d 223 (1956); State ex rel. Thomson v. Giessel,
265 Wis. 185, 60 N.W.2d 873 (1953).
56. E.g., CAL. PUB. UTIL. CODE 29290 (West 1965); GA. CODE ANN. 95-2416,
95-2428 (1972); MAss. ANN. LAWS ch. 161A, 18 (1970); N.Y. PUB. AUTH. LAW 371-72,
536, 566, 566a, 1207g, 1275 (McKinney 1970).
57. E.g., N.Y. PUB. AUTH. LAW 1243, 1299-o (McKinney 1970).
58. 282 N.Y. 306, 26 N.E.2d 269 (1940).
59. Under the statute the payments in lieu of taxes were not to exceed the tax that
was collected on the land before the Authority purchased it. N.Y. UNCONSOL. LAWS
6971 (McKinney 1961).
60. 282 N.Y. at 321-22, 26 N.E.2d at 276. See also Opinion of the Justices, 334 Mass.
721, 136 N.E.2d 223 (1956) (property-including that leased to commercial users-and
income on bonds of proposed Massachusetts Port Authority tax exempt).
61. See text accompanying notes 84-87 infra.
62. See Gerwig, supra note 9, at 611 n.lll. Some evidence that courts are occa-
sionally willing to allow taxation of property over which the authority exercises con-
trol is found in Borough of Moonachie v. Port of New York Authority, 38 N.J. 414,
185 A.2d 207 (1962). The court there held that land acquired by the authority was tax
exempt but that a manufacturing plant built by the Authority thereon and leased
for revenue was subject to local taxes. See also Todd Shipyards Corp. v. Weehawken
Twp., 45 N.J. 336, 212 A.2d 364 (1965).


I__ _ILI













As long as authorities carry out public purposes, there seems to be
little point in taxing them, raising their costs, and using the revenue
to carry out other public purposes, except perhaps in the case of an
authority that accumulates a large surplus. In that case it might be
argued that once the authority's duties are fulfilled, the other public
purposes of the local governments ought to benefit from the revenues
contributed by local citizens. Some authorities are already required
to make payments in lieu of taxes by their creating legislation;03 the
application of such a provision might best be triggered by the accu-
mulation of a surplus.

D. History
At first the history of authorities was closely tied to that of special
districts, which were in widespread use before the authority device
was fully developed.64 Not only were many of the judicial doctrines
relating to special districts carried over to authorities, but also legis-
lative attitudes toward the two types of bodies tended to be similar
because they were created for many of the same reasons.
The most important of these reasons may have been the desire to
avoid constitutional and statutory limitations on the amount of debt
that a state, county, or municipality may incur.65 These limitations
originated in the economic disasters of the nineteenth century. The
depression of 1837-39 found a number of state governments hope-
lessly overextended in their borrowing to finance public works; in a
period of declining revenues and high fixed costs, nine state govern-
ments were forced to default, and four of these eventually repudiated
portions of their outstanding debt.66 In the depression of 1873-
79, it was primarily local, rather than state, governments that were
63. E.g., N.Y. PUB. AUTH. LAW 1296 (McKinney Supp. 1972) (New York State
Environmental Facilities Corporation). See also N.Y. UNCONSOL. LAWS 6971 (Mc-
Kinney 1961); N.J. STAT. ANN. 32:1-144 (1963) (Port of New York Authority, volun-
tary payments authorized).
64. For early history of authorities and other special governments, see COUNCIL
REPORT, supra note 9, at 9-21; Gerwig, supra note 9, at 594-99; Tilden, Forerunners of
the Public Authority, 7 WM. & MARY L. REV. 1 (1966). See also Quirk & Wein, supra
note 3; Note, Constitutional Restrictions on the Use of Public Authorities in the New
England States, 43 B.U. L. REV. 122 (1963).
65. See J. BOLL.NS, supra note 8. at 7-9; PunLIC AUTnHORTIrs, supra note 3, at 31;
Makielski, The Special District Problem in Virginia, 55 VA. L. REV. 1182, 1187 (1969);
Williams & Nehemkis, Municipal Improvements as Affected By Constitutional Debt
Limitations, 37 COLUM. L. Rr.v. 177, 201-09 (1937). See generally Morris, Evading Debt
tLimitations with Public Building Authorities: The Costly Subversion of State Con-
stitutions, 68 YALE L.J. 234 (1958). See also text accompanying notes 30t-15 infra.
However, it is easy to overcmphasiie the role played by the desire to avoid debt
limitations: "It is true that some special districts have been created to avoid debt
limits, but it is also true that most of the special districts in existence today would
probably have been created even if very slate granted its local gol crnments unlimited
power to incur debt." L. GOODALL, STATE REGULATION OF LOCAL ISDEIIrTIDNESs IN 1IIE
UNrrITED STATES 65 (1961).
66. B. RATCHFORD, AMERICAN STATE DEBTS 98-99, 114 (1941).


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overextended; defaults amounted to upwards of 150 million dollars
out of a total of 750 million dollars of outstanding debt.67 These di-
sasters, and further defaults in 1893, prompted many states to adopt
constitutional restrictions on the types and amounts of debt that state
and local governments could incur.Y As a result, a large number of
states have long had constitutional restrictions on state debt, which
set a debt ceiling, limit bond maturities to twenty years or less, or re-
quire referendum approval of debt proposals.'' Similarly, every state
has restricted the incurring of debt by local gaovrnlm nts, usually in
one or more of five ways: (1) a limit on the amount of debt; (2) a time
limit on the maturity of bonds; (3) a maximum rate of interest; (4)
restrictions on th r may be issued; and (5)
requirements that.a referendum be held before bonds are issued.70
Of these, the most common limit is on the amount of debt, usually
expressed as a percentage of assessed valuation.71
Special districts and authorities, although they may be subject to
their own limitations,72 could finance projects without adding to the
debt of the general governments, because they were considered to be
entirely separate governmental units.73 Thus, whenever debt limita-
tions restricted further financing, the creation ot a special govern-
ment oitered a way around the law.

67. A. HILLHOUSE, MUNICIPAL BONDS: A CENTURY OF EXPERIENCE 15-17 (1936); Hill-
house, Lessons from Previous Eras of Default, in MUNICIPAL DEBT DEFAULTS: THEIR
PREVENTION AND ADJUSTMENT 10 (C. Chatters ed., Pub. Admin. Serv. Publication No.
33, 1933).
68. See generally A. HILLHOUSE, supra note 67; L. LANCASTER, STATE SUPERVISION OF
MUNICIPAL INDEBTEDNESS (1923); P. STUDENSKY, PUBLIC BORROWING (1930). For a concise
summary of the history of constitutional limitations on borrowing, see L GOODALL,
supra note 65, at 4-17.
69. W. MITCHELL, THE EFFECTIVENESS OF DEBT LIMITS ON STATE AND LOCAL GOVERN-
MENT BORROWING 35-37 (1967). Mitchell finds only seven states, one of which is
Massachusetts, that allow borrowing through solely legislative action with no limits on
the amount or purpose of debt that may be incurred. The nineteen that require
voter approval of borrowing include California, New York, New Jersey, and Illinois,
while states with constitutional debt ceilings include Michigan, Ohio, and Pennsylvania.
See also COUNCIL REPORT, supra note 9, at 13-17.
70. L. GOODALL, supra note 65, at 18-20. See generally U.S. ADVISORY COMMN. ON
INTERGOVERNMENTAL RELATIONS, STATE CONSTITUTIONAL AND STATUTORY RESTRICTIONS ON
LOCAL GOVERNMENT DEBT (1961). For a detailed state-by-state report on restrictions on
local borrowing, including a discussion of relevant judicial decisions, see B. MANN &
F. BIRD, STATE CONSTITUTIONAL RESTRICTIONS ON LOCAL BORROWING AND PROPERTY TAXING
POWERS (1965).
71. L. GOODALL, supra note 65, at 24-25. Sometimes such limitations are imposed
in the form of maximum tax rates that may be levied for debt service. U.S. ADVISORY
COXMIN. ON INTERGOVERNMENTAL RELATIONS, supra note 70, at 27. The limitations are
constitutional in about thirty states and imposed by statute in the others. L GOODALL,
supra, at 18.
72. See text accompanying notes 166-70 infra.
73. For a discussion of the decisions in which the bonds of special governments
came to be seen as debt separate from that of the parent government, see text ac-
companying notes 166-79 infra.


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While the method of financing improvements through current
revenue, if not through revenue bonds, was fairly well known in the
early part of the twentieth century, it seems to have been less often
employed than the creation of special districts with their own taxing
powers. The establishment of the Port of New York Authority in
1921 first dramatized revenue-bond financing and popularized the
designation "authority" for a device that used this method. The Port
Authority, modeled after the Port of London Authority, was designed
to supervise the over-all development of New York harbor.74 The
harbor lies in both New Jersey and New York waters, and its develop-
ment had been hindered by duplication of facilities and by political
rivalries and jealousies among the municipalities dotting the shores
in both states. An interstate compact was drawn up, in which New
York and New Jersey agreed to integrate development throughout
the harbor. Thus, the prototype of the public authority was initially
designed to solve a jurisdictional problem.75 Apparently, the method
of financing through revenue bonds was devised only after the Au-
thority was in actual operation.70 At first the Authority was financed
by a state grant; the states found it necessary to turn over to the Au-
thority projects already producing revenue in order to reassure bond
buyers. Subsequently, the revenues and deficits of the various facilities
were pooled, and the enterprise as a whole has been self-sustaining on
revenue bonds alone.77
The depression of the 1930's ushered in the era of real growth in
the number of authorities. A nationwide decrease in the assessed
value of taxable property plus increased resistance among taxpayers
to government debt met head on with the desire of the federal gov-
ernment to aid economic recovery through the construction of public
works.78 The model of the Port of New York Authority and its reli-
ance on bonds paid off through user charges rather than taxes offered
a partial solution. In 1934, President Roosevelt sent a letter to all
forty-eight governors suggesting that states and cities cooperate with
the federal government in stimulating public works by (1) authorizing
existing governmental units to issue revenue bonds, and (2) creating

74. See generally E. BARD, THE PORT OF NEW YORK AUTHORITY (1942); F. BIRD, A
STUDY OF THE PORT OF NEW YORK AUTHORITY (1949); Goldstein, The Port of New York
Authority, 5 J. PuB. L. 408 (1956); Goldstein, An Authority in Action-An Account of
the Port of New York Authority and Its Recent Activities, 26 LAw & CONTEMP. PROB.
715 (1961).
75. Edelstein, supra note 9, at 181; SENATE SPECIAL COMM. TO INVESTIGATE THE
ACrTVITIES AND FUNCTIONS OF THE PORT OF NEW YORK AUTHORITY, N.J. LEGIS., RrPORT
OF SPECIAL SENATE INVESTIGATING COMM. UNDER SENATE RES. NO. 7 OF THE YEAR 1961, at
7 (1962) [hereinafter N.J. SENATE REPORT].
76. See E. BARD, supra note 74, at 226-46.
77. Id. at 265; N.J. SENATE REPORT, supra note 75, at 12-13.
78. COUNCIL RFPORT, supra note 9, at 25.


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new public corporations that could do the same.79 There was an al-
most unanimously favorable response from the states, and increas-
ingly the name "public authority" was applied to the revenue-fi-
nanced special governments. As contrasted with special districts,
which typically were created by local governments to provide ser-
vices, authorities became primarily associated with state-initiated
projects of capital construction, such as dams, bridges, electric power
facilities, turnpikes, and buildings."0 World War II, which left a
backlog of needs in areas of state responsibility, added momentum to
this development, as did the unprecedented post-war demand for cap-
ital facilities to accommodate the increasingly mobile population.81
Thus, while revenue bond issues totaled about 188 million dollars in
1940, they reached about 600 million dollars in 1950, and 4 billion
dollars in 1963.82 The number of special districts and authorities
greatly increased as well.83
One further indication of the success achieved by the larger au-
thorities by the mid-1960's is the fact that many of them had a surplus
of funds. Not only did the Port of New York Authority build the 575
million dollar World Trade Center with surpluses, it also took over
the operation of the bankrupt Hudson and Manhattan Railroad, ab-
sorbing an 8 million dollar deficit in the first year in addition to
spending 43 million dollars on modernization.84 The surplus of the
Triborough Bridge and Tunnel Authority was a major point of con-
tention in the debate over the development of an integrated New
York transportation system.85 In 1968, the New Jersey Highway Au-
thority opened a Garden State Arts Center with its surpluses,86 and a
number of other already profitable authorities turned excess revenues
or new bond issues into supplementary facilities or improvements on
existing projects.87
As would be expected, increased familiarity and continued suc-
cess with authorities has resulted in greater reliance upon them and
a search for further problems to which they may be profitably ap-
plied.

79. COUNCIL REPORT, supra note 9, at 26-27; URBAN AREAS, supra note 3, at 247-48.
80. URBAN AREAS, supra note 3, at 249. For a list of major authorities established
in the 1930's and 1940's, see id. at 248-49.
81. Gervig, supra note 9, at 597.
82. URBAN AREAS, supra note 3, at 250.
83. See text accompanying note 15 supra.
84. The Super-Agency that Moves a Metropolis, Bus. WEEK, May 11, 1968, at 73, 93.
85. URBAN AREAS, supra note 3, at 145-47, 255. See also J. Doic, METROPOLITAN
TRANSPORTATION POLITICS AND THE NEW YORK REGION 39-40 (1966).
86. URBAN AREAS, supra note 3, at 257.
87. Id. at 256-57.


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1389


III. MULTICOUNTY AUTHORITIES
Toward the end of the 1960's, there was a great outburst of
growth in "multicounty authorities," special governments overlap-
ping traditional government boundaries and combining the financ-
ing methods of special districts and authorities. Their responsibilities
to date have primarily been in the field of transportation: In the New
York City area, a transportation authority covers the City and seven
counties;ss in Kansas City, seven counties in two states;so in Washing-
ton, D.C., the District of Columbia and three cities;90 in Detroit,
six counties;9' in Niagara, two counties;92 in Minneapolis, seven
counties;93 and in Boston, seventy-eight communities.94
Multicounty authorities are already among the largest and most
powerful of special governments and have the greatest potential im-
pact on urban affairs. In order to help evaluate what has been and
can be done with these experimental bodies, several of them will be
described in detail.

A. The New York Metropolitan Transportation Authority (MTA)
The MTA was created in 1968 to unify responsibility for com-
muter transportation and related services, including air, water, and
rail services, in the New York City area.95 The Authority has jurisdic-
tion over all of the City and in seven surrounding New York counties,
but contiguous counties in New Jersey and Connecticut are not in-
88. New York Metropolitan Transportation Authority, established in 1965 as the
New York Metropolitan Commuter Transportation Authority by ch. 324, 3 [1965]
N.Y. Laws 1043, as amended, N.Y. Pun. AUTH. LAW 1260-78 (McKinney 1970), as
amended, N.Y. PUB. AUTH. LAW 1263 to 1276-a (McKinney Supp. 1972). See text
accompanying notes 95-115 infra.
89. Kansas City Area Transportation Authority, established in 1965 by ch. 115 [1965]
Kan. Laws 261, as amended, KAN. STAT. ANN. 12-2524 to -2535 (Supp. 1972), and H.B.
No. 333 [1965] Mo. Laws 376 (codified at Mo. ANN. STAT. 238.010-.100 (Supp. 1972)).
90. Washington (D.C.) Metropolitan Area Transit Authority, established in 1969 by
Act of Nov. 6, 1966, Pub. L. No. 89-774, 80 Stat. 1324, as amended, National Capital
Transportation Act of 1969, Pub. L. No. 91-143, 83 Stat. 320. See also D.C. CODE ANN.
1-431 to -436 (1967); MD. ANN. CODE art. 41, 317-1 to -86 (1971); VA. CODE ANN.
iS 56-529 to -530 (1969).
91. Southeastern Michigan Transportation Authority, established in 1967 by No. 204
[1967] Mich. Acts 276 (codified at MICH. COMP. LAWS ANN. 124.401-.425 (Supp. 1973)).
92. Niagara Frontier Transportation Authority, established in 1967 by N.Y. PUB.
AUTH. LAw 1299 to 1299-s (McKinney 1970).
93. Twin Cities Area Metropolitan Transit Commission, established in 1967 by
ch. 892 [1967] Minn. Laws 1891, as amended, MINN. STAT. ANN. 473A.01-.18 (Supp.
1973).
94. Massachusetts Bay Transportation Authority, established in 1964 by ch. 563
[1964] Mass. Acts 429, as amended, MAss. ANN. LAWS ch. 161A, 1-29 (1970). See text
accompanying notes 116-37 infra.
95. N.Y. Pus. AUTH. LAW 1264(1) (McKinney 1970).









Michigan Law Review


clouded9 In the interest of a unified mass transportation policy, the
MTA was given control over the extant New York City Transit Au-
thority (NYCTA) and the Triborough Bridge and Tunnel Authority
by tile device of making the MTA's directors ex oflicio (and the only)
directors of the earlier two Authorities."7 The MTA has a chairman
and ten other members,"9 at least nine of whom must reside in the
area of the Authority's jurisdiction, and three of whom are to be ap-
pointed only on the recommendation of the mayor of New York
City.99
The MTA has typical broad corporate powers'00 and general gov-
ernmental powers, such as the powers to make surveys and recommen-
dations, subpoena witnesses in investigations, and do all things nec-
essary, convenient, or desirable to carry out its purposes.'01 Unlike
many other statutes creating authorities, the statute creating the
MTA waives sovereign immunity and expressly consents to suits
against the Authority.102 Special powers relating to transportation
give the MTA virtually plenary authority over the entire range of
transportation facilities. It may (1) acquire any transportation facil-
ity; (2) construct, maintain, improve, extend, or repair any such
facility; (3) on a majority vote after a public hearing, establish and
collect such tolls and charges for the use of its facilities as are nec-
essary to keep the operations self-sustaining; (4) establish schedules
and standards of operation, including rules and regulations gov-
erning the conduct and safety of the public; (5) carry out any of
its powers or duties through a subsidiary corporation; (6) receive
grants; and (7) do all it deems necessary to manage and control its
facilities.103 The Authority's rules and regulations prevail over con-
flicting local laws and ordinances.'10
96. The Authority is authorized, however, to enter into agreements to build a
New York-Connecticut bridge with any similar agency in Connecticut. N.Y. PUB. AUTH.
LAw 1266(9)(b) (McKinney 1970).
97. N.Y. Pun. AUTH. LAW 552(1), 1201(1) (McKinney 1970).
98. The members are appointed by the governor for eight-year terms with the
advice and consent of the state Senate, N.Y. PUB. AUTH. LAW 1263(1) (McKinney Supp.
1972), and are removable for cause by the governor, N.Y. PUB. AUTH. LAW 1263(7)
(McKinney 1970).
99. N.Y. Pun. AUTH. LAw 1263(1) (McKinney Supp. 1972).
100. E.g., the power to sue and be sued, to borrow money and issue bonds and notes,
to invest funds in reserve or sinking funds, to make bylaws, to enter into contracts, to
acquire property, and to appoint officers and employees. N.Y. PUB. AUTH. LAW 1265
(McKinney 1970), as ameiided, N.Y. Pun. AUTI. LAW 1265 (McKinney Supp. 1972).
101. N.Y. Pun. AUTH. LAw 1265 (McKinney 1970). The Authority is supposed to
continue operations as long as it has bonds or other obligations outstanding and
until its existence is terminated by law. N.Y. Pus. AUTH. LAW 1263(8) (McKinney
1970).
102. N.Y. PUB. Aunt. LAw 1276 (McKinney 1970).
103. N.Y. PUB. Aurr. LAW 1266(1)-(6), (8) (McKinney 1970).
104. No other political subdivision has jurisdiction over any of the Authority's
activities. N.Y. PUB. AUTH. LAw 1266(8) (McKinney 1970).


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The MTA has the power to issue bonds backed only by its reve-
nues.101 The Authority itself has no taxing powers and cannot pledge
the credit of the state; yet, it is empowered to receive state funds.100 It
was probably anticipated that state funding would be necessary, since
the NYCTA had been running at a revenue deficit greater than the
Triborough's surplus.'07 Indeed, in 1968, New York State voters ap-
proved a.2.5 billion dollar bond issue for transportation throughout
the state, including MTA facilities.'08
Although the public service commission is explicitly declared not
to have any authority over the MTA, there is some supervision of
the Authority by state and local governments. Like all New York
authorities, the MTA must submit to the governor and other state
officials a detailed annual report on its finances and operations, as
well as a budget report and an audit report after examination by
the state comptroller.109 More direct control within the City of New
York is exercised by the mayor, city council, and city board of
estimate, through the power to veto certain activities relating to the
NYCTA.10
Lest the importance of political considerations be forgotten, it is
worth noting that four plans for the organization of the MTA were
hotly debated before the final choice was made."1 Commissioner
Gilhooley of the NYCTA advocated a new authority with only man-
agerial responsibility; its capital budget was to be controlled by New
York City.x12 A second model, proposed by Mayor John Lindsay,
would have continued the NYCTA and the Triborough Authority
without merger but would have reorganized their boards and given
the mayor a veto power over the actions of each."3 A third proposal,
105. N.Y. PUB. AuTH. LAW 1269(1) (McKinney 1970). The Authority and the
interest it pays to its bondholders are exempt from state taxation. N.Y. PUB. AUTH.
LAW 1275 (McKinney 1970).
106. N.Y. PUB. AUTH. LAW 1266(6) (McKinney 1970).
107. URBAN AREAS, supra note 3, at 194.
108. Id. at 212.
109. N.Y. Pus. AUTH. LAw 2500-03 (McKinney 1970). See also N.Y. PUB. AUtH.
LAw 1276-a (McKinney Supp. 1972) (Comptroller to make yearly audit of Authority
books and records).
110. The mayor and the board of estimate have the power to veto NYCTA projects
with capital costs in excess of 1 million dollars. N.Y. PUB. ArrH. LAW 1203(l)(b)
(ii) (McKinney 1970). In addition, the mayor, city council, and city board of estimate
can veto the schedule of transit facilities authorized to be provided by the Transit
Construction Fund, a separate corporate governmental agency administered by three
trustees, two of whom are appointed by the mayor. N.Y. PUB. AUTH. LAw 1225-e,
-g (McKinney Supp. 1972). The Construction Fund's purpose is to assist the MTA
through agreements with the NYCTA to provide transit facilities. N.Y. PUB. AUTH.
LAW 1225-d (McKinney Supp. 1972).
111. For a study of the politics of transportation in the New York area up to 1966,
see J. DOGc, METROPOLITAN TRANSPORTATION POLITICS AND THE NEW YORK REGION (1966).
112. See URBAN AREAS, supra note 3, at 82-86.
113. See id. at 136-38, 143-50. Under this proposal a new administrator of trans-


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put forward by State Senator Mackell, would have put both capital
and expense budgets under the full control of the new authority, with
a signiificant shift to state orientation provided by the requirement
that the state make up any debt-service fund deficit.'14
The adopted plan was a modified version of a fourth proposal,
sugCgsted by Governor Rockefeller. Its strong state orientation is in-
dicated by its regional, rather than citywide, jurisdiction, its state
funding, its provisions for appointment and removal of members by
the governor, and its extensive powers within the City of New
York."" The differences in the proposals reflect different views of an
authority's role in areawide planning and of where ultimate control
should lie. Interestingly enough, none of the proposals envisioned a
role for the electorate, either in approving the creation of the new
authority, in electing its directors, or in voting specific funds for its
projects.

B. Massachusetts Bay Transportation Authority (MBTA)
The MBTA is among the most interesting of the new authorities,
primarily because it must accommodate the interests of seventy-eight
cities and towns in the Boston area."11 The MBTA has the usual cor-
porate powers,117 and its powers over transportation are extensive.
Within its jurisdiction the MBTA has exclusive power to provide
mass transportation service; it is not subject to the control of any
city, town, or other licensing authority."1 The MBTA may construct,
extend, and modify mass transportation facilities"19 and has the power
of eminent domain.120 It may also establish, on a self-liquidating basis
and backed by revenue bonds alone, separate units of mass transpor-
tation facilities.'21
portation would serve at the pleasure of the mayor as chairman of both authorities.
Each authority would have an expense budget, but the capital budget of the NYCTA
would be controlled by the city, while the Triborough Authority would continue to
issue revenue bonds for its capital. Id.
114. See id. at 166-78.
115. See generally id. at 181-236.
116. Provisions are made whereby cities and towns may elect to join the Authority,
MAss. ANN. LAWS ch. 161A, 16 (1970), or discontinue local service, MAss. ANN. LAWS
ch. 161A, 15 (1970).
117. MASS. ANN. LAWS ch. 161A, 2-3 (1970) (e.g., power to sue and be sued).
118. MAss. ANN. LAWS ch. 161A, S 3(i) (1970). The MBTA is subject to the Depart-
ment of Public Utilities in so far as safety of its equipment and operations is con-
cerned, but it is expressly provided that schedules and routes are not to be considered
matters of safety and that the directors of MBTA shall exclusively determine the
character and extent of the services and facilities to be furnished without the approval
or direction of any state or municipal department, board, or commission. MAss. ANN.
LAws ch. 161A, 3(i) (1970).
119. MASS. ANN. LAWs ch. 161A, 3(k) (1970).
120. MASS. ANN. LAws ch. 161A, 3(o) (1970).
121. MAss. ANN. LAws ch. 161A, 4 (1970).


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June 1973] Comments 1393

The financing of the MBTA is fairly complicated but worthy of
note. The Authority is authorized to issue bonds for one or more of
three broad purposes: (1) to acquire and construct mass transporta-
tion facilities for express service; (2) to design and acquire, for itself
or for lease to a private company, facilities to provide local service;
and (3) to pay capital costs.1'2 A limit of 349 million dollars is placed
on the value of bonds that may be outstanding at any given time.123
Under certain circumstances the state participates in meeting Au-
thority obligations.124
If the state is required to make payments, the cities and towns un-
der the jurisdiction of the Authority are to be assessed to reimburse
the state. If there is a net cost of express service, seventy-five per cent
of it is borne by the cities and towns in proportion to their respective
number of commuters (with Boston paying at least thirty of the
seventy-five per cent).12 Beginning in 1976,126 all cities and towns are
to be assessed for the net cost of local service, half of the net cost in
proportion to their populations and half in proportion to the amount
of total losses attributable to their local routes.'27
The method of local control over the MBTA is unique. In addi-
tion to the five-member Board of Directors128-one of whom must be

122. MASS. ANN. LAWS ch. 161A, 23 (Supp. 1972). Refunding bonds are authorized
separately, and all bonds must mature within forty years. MAss. ANN. LAWS ch. 161A,
I 23 (1970).
123. MAss. ANN. LAws ch. 161A, 23 (Supp. 1973).
124. The Commonwealth's office for administration and finance is authorized to
enter into a contract under which the Commonwealth agrees to pay a portion of the
net cost of service. MAss. ANN. LAWS ch. 161A, 28 (Supp. 1972). This assistance is
limited primarily to the annual debt service on bonds issued before 1971 for which
such a contract was made and the annual debt service on 90 per cent of the bonds (up
to 257 million dollars worth) issued thereafter. MAss. ANN. LAws ch. 161A, 28 (Supp.
1972). However, if the Authority lacks enough cash to meet its obligations at any
time during the year, the state will make the necessary payments, MASS. ANN. LAWS
ch. 161A, 13 (1970), as it will at the end of the year if there has been a net cost of
service, MAss. ANN. LAws ch. 161A, 12 (1970). This latter case may be rare since all
express service other than one named branch is to be operated so that no net cost of
service other than debt service shall arise. MASS. ANN. LAWS ch. 161A, 5(d) (1970).
If funds are not available at the time principal or interest comes due on a bond or
note of the Authority, the state must also meet this obligation, and the Authority or
any bondholder can require the state to pay. MAss. ANN. LAws ch. 161A, 13 (1970).
125. MAss. ANN. LAWS ch. 161A, 8 (1970). The same section of the statute provides
that the other twenty-five per cent of the cost is borne by those cities or towns having
express stations.
126. A temporary plan for assessments to cover the cost of local service to fourteen
cities and towns, paid by the state, was provided for the period from 1965 to 1975. See
MAss. ANN. LAws ch. 161A, 9 (1970).
127. MAss. ANN. LAws ch. 161A, 10-11 (1970).
128. The governor appoints the directors, no more than three of whom may be of
the same political p:rty. They serve for five years with modest salaries and are re-
movable for cause by the governor. The Metropolitan Area Planning Council (on the
structure and duties of the Planning Council, see MAss. ANN. LAWS ch. 401, 24-29
(Supp. 1971)) approves two of them, the advisory board approves one, 14 cities and


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experienced in transportation, one a member of organized labor, and
one experienced in administration and finance'2"-the creating stat-
ute establishes an independent advisory board, which oversees the ac-
tions of the MBTA. No "substantial change in mass transportation"
may be made without thirty-days' notice to the board.130 Also, the ad-
visory board must approve all fare changes': and the mandatory
periodic revisions of the MBTA's program for mass transportation.132
Finally, an itemized budget must be passed by the board,'33 and
yearly reports must be sent to the board, the governor, and the gen-
eral court.'34
The advisory board, which acts by majority vote,1" consists of the
city manager or mayor of the cities, and the chairman of the board.of
selectmen of the towns affected by the MBTA.'13 Each city and town
has one vote plus additional votes or fractions thereof determined by
multiplying one and one-half times the total number of cities and
towns in the Authority by the percentage of all assessments that the
given city or town has paid. Since assessments of cities and towns are
based on the number of commuters for express service and on the per-
centage of population and proportionate net cost of service for local
service, the votes are very roughly weighted according to population,
although each city and town has at least one vote.a37

C. San Francisco Bay Area Rapid Transit District (BARTD)
Unlike the MTA and the MBTA, which took over existing facil-
ities, BARTD was created primarily to construct a new transporta-
tion system. After years of planning and construction, BARTD began
operation in three counties in the summer of 1972.1s8 It has eminent
towns approve one, and 64 cities and towns approve the last. MASS. ANN. LAWS ch. 161A,
6 (1970). The 14 cities and towns are all those with more than two full votes under
the representation scheme discussed in the text accompanying note 137 infra. The direc-
tor elected by these units must receive the votes of at least four of the included
municipalities. Since Boston has more votes than the other thirteen combined accord-
ing to the weighted-vote scheme, the director must in effect be approved by Boston
and three other cities. MAss. ANN. LAWS ch. 161A, 6 (1970).
129. MASS. ANN. LAWS ch. 161A, 6 (1970).
130. MASS. ANN. LAWS ch. 16IA, 5(f) (1970).
131. MAss. ANN. LAWS ch. 161A, 5(e) (1970).
132. MAss. ANN. LAws ch. 161A, 5(g) (1970).
133. MAss. ANN. LAWS ch. 161A, 5(i) (1970).
134. MASS. ANN. LAWS ch. 161A, 5(h) (1970).
135. MAss. ANN. LAWS ch. 161A, 6 (1970).
136. MAss. ANN. LAWS ch. 161A, 7 (1970).
137. The number of votes must be redetermined at the beginning of each new
year. The 14 cities and towns are those with more than two full votes out of a total
of 195. Boston was allocated 73.29 votes, and Cambridge had the second greatest num-
ber, 10.56. The smallest of the 14 is Belmont, with 2.31 votes. This leaves 6- cities and
towns, each with between one and two votes. MASS. ANN. LAws ch. 161A, 7 (1970).
138. The enabling legislation created BARTD in 1957, at which time five counties












domain powers'30 and the usual corporate powers,"0 as well as ex-
plicit authority to fix rates by a two-thirds vote.141 BARTD is more
locally than state oriented, since most of its ultimate financial sup-
port comes from local property taxes.14" General obligation bonds
payable from the tax revenues are permissible, but the debt thus in-
curred must not exceed fifteen per cent of the assessed value of prp-
erty within the district.143 BARTD is also allowed to issue revenue
bonds and in constructing a crucial link in its system-an under-
water rapid transit tube connecting San Francisco and Oakland-it
relied primarily on revenue bonds issued by the California Toll
Bridge Authority and backed by the earnings of the San Francisco-
Oakland Bay Bridge.145
If the BARTD board of directors unanimously approves a new
project, the issuance of bonds for this purpose must be approved by
a three-fifths majority of voters in a special referendum.146 No refer-
endum is required for the issuance of revenue bonds for the acquisi-
tion of equipment or rapid transit facilities if the issuance of general
obligation bonds has been previously approved.147

in the Bay Area were included. Ch. 1056, 3 [1957] Cal. Stats. 2292 (codified at CAL.
PUB. UTIL. CODE J 28600 (West 1965)). Two counties subsequently withdrew, leaving
San Francisco, Alameda, and Contra Costa counties. On the withdrawal of Marin and
San Mateo counties, see URBAN AREAS, supra note 3, at 272, 276-77. In 1964, the West
Bay Rapid Transit Authority, see ch. 104 [1965] Cal. Stats. 1964 1st Extraordinary Sess.
324 (codified at CAL. PUB. UTIL. CODE App. 3 (West 1965)), was created to cover San
Mateo county; it may link up with BARTD in the future.
139. CAL. PUB. UTIL. CODE 28953-55 (West 1965).
140. CAL. PUB. UTIL. CODE 28950-51, 28970, 29010 (West 1965).
141. CAL. PUB. UTIL. CODE 29038 (West 1965).
142. Taxes at a rate not greater than five cents per 100 dollars of assessed
valuation of taxable property may be levied, but they are to be supplemental to
revenues from the various facilities and are limited to actual requirements. CAL. PUB.
UTIL. CODE 29123 (West 1965). There is provision for an additional property tax to
meet all sums due (for principal and interest) on the district's general obligation bonds.
CAL. PUB. UTIL. CODE 29121 (West 1965). In addition, a retail transaction and use
tax (or alternate financing approved by the electorate) was required to be levied by
the board of directors beginning in 1969, to be used to the extent of 150 million
dollars plus costs and debt service to help finance the BARTD system. CAL. PUB. UTIL.
CODE 29140-44 (West Supp. 1973).
143. CAL. PUB. UTIL. CODE 29150 (West 1965).
144. CAL. PUB. UTIL. CODE 29143 (West Supp. 1973).
145. CAL. PUB. UTIL. CODE 30771-78 (West 1969).
146. CAL. PnB. UTIL. CODE 29158, 29168 (West 1965), as amended, CAL. PUB. UTIL.
CODE 29158 (West Supp. 1973). If the board of supervisors of one of the member coun-
ties does not approve, a time period for further study and amendment is allowed so that
unanimity may be achieved; if a county still does not approve, it must withdraw from
BARTD. Failure to withdraw is taken as acquiescence in the last amended report. CAL.
Pun. UTIL. CODE 29157 (West 1965).
147. CAL. PUB. UTIL. CODE 29210 (West 1965), as amended, CAL. PUB. UTIL. CODE
3 29240 (West Supp. 1973).


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In its selection of directors BARTD also allows for more local in-
fluence than the MTA and the MBTA. Each county has a "city
selection committee," composed of the mayor of each incorporated
city within the county."' This committee and each county's board
of supervisors select BARTD's board of directors,'49 who must be
residents and voters of the county from which they are appointed.150
Finally, all meetings of the board must be open to the public,1t1
and an annual financial report is to be submitted to the cities and
counties and to the general public on request.'52

D. The New York State Environmental
Facilities Corporation (EFC)
The purposes of the EFC, created in 1970 to replace the New
York State Pure Waters Authority, are the "planning, financing, con-
struction, maintenance and operation" of sewerage collection and
treatment systems, air pollution control facilities, water management
and collection facilities, and solid waste disposal systems.153 Appar-
ently allowed to operate throughout the State of New York,15 the
EFC may effect its purposes with regard to sewerage, for example, in
various ways. First, it may contract with a mnirinality nr state
agency to provide facilities.155 Second, it may make construction loans
to municipalities and state agencies.'56 Third, it may contract to con-
struct and operate facilities on behalf of a municipality.157

148. CAL. GovT. CODE 50270 (West Supp. 1973).
149. Each county with a population of over 500,000 is represented by four directors,
two chosen by its board of supervisors and two by its city selection committee. A county
with a population of more than 350,000 but less than 500,000 has three directors, two
appointed by its board of supervisors and one by its city selection committee. And a
county with fewer than 350,000 citizens is represented by two directors, one chosen by
each group. CAL. PUB. UTIL. CODE 28733 (West Supp. 1973). At present the board
consists of eleven members serving four-year terms. URBAN AREAS, supra note 3, at 272.
No provision is made for removal of directors.
150. CAL. PUB. UTIL. CODE 28731 (West 1965).
151. CAL. PUB. UTIL. CODE 28790 (West 1965).
152. CAL. PUB. UTIL. CODE 28770 (West 1965).
153. N.Y. PUB. AUTH. LAW 1283 (McKinney Supp. 1972).
154. Its activities are "on behalf of municipalities and state agencies"; it is to assist
"municipalities, state agencies, the state and persons"; and its purposes are "for the
benefit of the people of the state of New York." N.Y. PUB. AUTH. LAW 1283 (McKinney
Supp. 1972). See also N.Y. PUB. AUTH. LAw 1285(1)(b) (McKinney Supp. 1972) (Author-
ity's special powers allow it to deal with any municipality that meets certain condi-
tions).
155. N.Y. PUB. Aunt. LAw 1285(1) (McKinney Supp. 1972).
156. N.Y. PUB. AUTH. LAW 1285(2) (McKinney Supp. 1972).
157. N.Y. PBn. AUTH. LAw 1285(3) (McKinney Supp. 1972). If nine provisions, in-
cluding one requiring that the municipality's full faith and credit back its annual
payments, are complied with, this contract can be converted into a lease-purchase
arrangement whereby title to the facilities will eventually vest in the municipality.
N.Y. Pun. AUTH. LAw 1285(3)(c) (McKinney Supp. 1972).


____










Comments


The EFC has other special powers, including the renting and
leasing of facilities, advising and planning in certain matters upon
request, and contracting with private firms for help in pilot proj-
ects.158 All of these powers, with regard to sewerage, were possessed by
the old Pure Waters Authority;159 when the EFC was created, similar
powers with respect to air pollution control, water management, and
storm water collection facilities were added.160
Like a traditional authority, the EFC may issue bonds and notes.'61
It is expressly declared that neither the state nor any municipality
shall be liable on these.'63 Nevertheless, the state has a large role in
financing the authority, for it is to appropriate money annually to
make up any difference between the funds placed in reserve by the
EFC and the maximum amount of principal and interest that may be-
come due in the succeeding year.103
The EFC is controlled by seven directors serving six-year terms:
the commissioner of environmental conservation, the commissioner
of health, the commissioner of the office for local government, and
tour others appointed by the governor with the advice and consent of
the senate.1"4

E. The General Nature of the Muticounty Authority
Although the new multicounty authorities derive considerable in-
spiration from the entities generally known as "authorities" and may
indeed merge several of them (as does the NYMTA) or be financed in
part by one (as is BARTD) the four bodies described above combine
features of both special districts and authorities.1"6 All depend to
some extent on tax funds. Both the EFC and the NYMTA have a
firm state commitment to back their financial obligations if necessary,
so neither need rely solely upon revenue bonds. The MBTA is
backed by state contributions and assessments upon the constituent
cities and towns, and BARTD is founded on local property taxes.
However, these multicounty authorities are not merely enormous
special districts, for each relies heavily on revenue bonds and is com-
mited to finance services as much as possible through user charges.
158. N.Y. PUB. AUTH. LAW 1285(4), (5), (8) (McKinney Supp. 1972).
159. New York State Pure Waters Authority Act, ch. 722, 1, [1967] N.Y. Laws 1907,
1912-17, as amended, Act of June 28, 1968, ch. 954, 1-2, [1968] N.Y. Laws 2789, as
amended, Act of May 26, 1969, ch. 1099, 5-12, [1969] N.Y. Laws 2934.
160. N.Y. PUB. AUTH. LAW 1285-a (McKinney Supp. 1972).
161. N.Y. PUB. AUTH. LAW 1290(1)(c) (McKinncy Supp. 1972).
162. N.Y. PUB. AUTh. LAW 1290(8) (McKinney Supp. 1972).
163. N.Y. PUB. AUTH. LAW 1291(3) (McKinncy Supp. 1972).
164. N.Y. Pun. ATIr. LAW 1282(1) (McKinney Supp. 1972). The directors are
removable for inefficiency, neglect of duty, or nliscollduct. N.Y. Pun. Au'I. LAW
1282(6) (McKinney Supp. 1972).
165. See URBAN ARFAS, supra note 3, at 267-74.


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1Multicounty authorities are larger and more powerful than most
traditional authorities and are able to undertake deficit operations
because of their hybrid financing. however, they share, many of the
legal and policy problems of their predecessors.

IV. LEGAL STATUS AND LEGAL ISSUES
A. Constitutionality

Challenges to public authorities under state constitutions fre-
quently attack the very concept of a special government-without
distinction between those financed by taxes and those financed by
revenue bonds. Therefore, most of the doctrines and issues found in
cases involving special districts are equally relevant to those con-
cerning public authorities.
The earliest and most common attacks on special governments as-
serted that they impermissibly circumvent the debt limitations on
counties and municipalities. In most states, the courts have rejected-
this argument, emphasizing that each special government is an in-
dependent unit, subject to the debt limitation individually, if at
all.166 Consequently, where the jurisdictions of a city, a county, and a
number of special governments overlap, the total debt possible within
a given area is vastly increased. Kennebec Water District v. City of
Waterville1'e has been citeds68 as the first case holding that the debt of
a special government169 is not to be considered in calculating the debt
of a city. The court found that the debt limitation in the state consti-
tution applied only to cities and towns, and not to "quasi-municipal
corporationss" such as the Water District." Another early case,
Paine v. Port of Seattle,"1 concluded that the special government in

166. See, e.g., Kocsis v. Chicago Park Dist., 362 Ill. 24, 198 N.E. 847 (1935); Robertson
v. Zimmermann, 268 N.Y. 52, 196 N.E. 740 (1935); City of Lehi v. Mailing, 87 Utah 237,
48 P.2d 530 (1935).
167. 96 Me. 234, 52 A. 774 (1902).
168. See, eg., Note, supra note 64, at 131. At least one case reached the same result
twelve years earlier. Wilson v. Board of Trustees of Sanitary Dist., 133 Ill. 443, 27 N.E
203 (1890).
169. Despite its name, the Water District appears to have been an authority since
it had no taxing power, 96 Me. at 256, 52 A. at 783, but paid its bondholders with reve-
nues from supplying water, 96 Me. at 258, 52 A. at 776.
170. 96 Me. at 254, 52 A. at 782. Special districts and authorities are usually subject
to statutory debt limitations. See, e.g., Kocsis v. Chicago Park Dist., 362 111. 24, 198 N.E.
847 (1935) (District held a municipal corporation; debt limitation statute applicable to
municipal corporations); Wilson v. Board of Trustees of Sanitary Dist., 133 Ill. 443,
27 N.E. 203 (1891) (District held a municipal corporation; debt limitation statute ap-
plicable to municipal corporations); State v. Metropolitan St. Louis Sewcr Dist., 365
Mo. 1, 275 S.W.2d 225 (1955) (all "political subdivisions" subject to debt limitation
statute). At least one case, however, has suggested that, in the absence of a statutory
provision, a special district is not subject to the debt limit for municipalities. City of
Lehi v. Mailing, 87 Utah 237, 48 P.2d 530 (1935).
171. 70 Wash. 294, 127 P. 580 (1912).


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question was a "municipal corporation" subject to its own debt limi-
tation; it suggested that the Port's debt might be added to that of the
general government if it could be shown that the legislature's sole
purpose was to avoid the limitation.'72 However, in the influential
New York case, Robertson v. Zimmermann,173 the court gave no weight
to the fact that, in creating the Buffalo Sewer Authority, the Common
Council of Buffalo had been influenced by its finding that "'the city
because of its constitutional debt limitation cannot finance this un-
dertaking by bond issue.' "74 The court held: "The project consti-
tutes a self-liquidating public improvement. The Authority cannot
pledge the credit of the city in any way, and its bonds are to be paid
solely from the revenues of the 'Authority.' The act does not offend
the provision of the Constitution referred to."'17
The independent status of special districts and authorities has
been the source of one response to the argument that they unconsti-
tutionally circumvent debt limitations. The "special fund" doctrine,
a theory similar in result, allows counties and municipalities, as well
as special governments, to operate revenue-producing projects with-
out adding to their recognized debt. According to this doctrine, con-
stitutional debt limitations only restrict that indebtedness that is to
be satisfied from future taxation and do not affect those municipal
obligations-or debts of authorities-that are payable solely from a
"special fund" of revenues.76 This doctrine was accepted in Kelly v.
Merry,'17 which concerned a conditional sales contract made by a
village for the purchase of machinery for a municipal lighting plant;
payment was to be made solely from the revenues of the lighting
system. The court rejected the contention that this arrangement
created a debt of the village: "Although an obligation is created on
the part of the village to collect the light rents and apply them to the
payments due on the contract, the moneys thus raised are not a part

172. 70 Wash. at 321, 127 P. at 582. For the view that a special government must be
sufficiently separate from the general government in order to be treated as separate
from the general government, see Reynolds v. City of Waterville, 92 Me. 292, 42 A.
553 (1898); Ayer v. Commissioner of Administration, 340 Mass. 586, 165 N.E.2d 885
(1960).
173. 268 N.Y. 52, 196 N.E. 740 (1935).
174. 268 N.Y. at 57, 196 N.E. at 742.
175. 268 N.Y. at 63, 196 N.E. at 744. Accord, Clayton v. Kervick, 52 N.J. 138, 244
A.2d 281 (1968); Tranter v. Alleghany County Authority, 316 Pa. 65, 173 A. 289 (193-4).
For other cases challenging authorities on debt limitation grounds, see California Toll
Bridge Authority v. Wentworth, 212 Cal. 298, 298 P. 485 (1931); Opinion of the
Justices, 334 Mass. 721, 136 N.E.2d 223 (1956); Application of Oklahoma Turnpike
Authority, 203 Okla. 335, 221 P.2d 795 (1950).
176. See generally Williams & Nehcnkis, s upra note 65, at 186-201; Comment,
Obligations of a State-Created Authority: Do They Constitute a Debt of the State?. 53
Mict. L REv. 439 (1955).
177. 262 N.Y. 151, 186 N.E. 425 (1933). See also Department of Water & Power v.
Vroman, 218 Cal. 206, 22 P.2d 698 (1933).


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of the general income of the village, for they are pledged to the pay-
ment of the special contract indebtedness."'"'
Although the special fund doctrine has been widely accepted,179
the courts have had some difficulty applying it to building authorities
where the city is to pay off the building bonds in yearly installments.
If the court construes the arrangement as a lease, the payments are
not debt under the common law rule that future rent is not debt;
however, if the arrangement is seen as an installment contract, some
or all of the contract price may he regarded as debt.'80 Nevertheless,
it can safely be said that the "separate entity" and special fund doc-
trines have in most states put revenue-bond financing beyond attack
on the ground of the avoidance of debt limitations.
A number of other attacks have been, and continue to be,
launched against authorities under state constitutions. None of these
has met with more than scattered success. In several cases it has been
urged that the creation of an authority violates a prohibition on lend-
ing to private partiess' or on taking property by eminent domain for
other than a public purpose.182 The definition of "public purpose"

178. 262 N.Y. at 159, 186 N.E. at 428.
179. See, e.g., Fox v. Bicknell, 193 Ind. 537, 141 N.E. 222 (1923); Interstate Power
Co. v. Incorporated Town of McGregor, 230 Iowa 42, 296 N.W. 740 (1941); Winston v,
City of Spokane, 12 Wash. 524, 41 P. 888 (1895). See generally Gerwig, Public Authori-
ties: Legislative Panacea?, 5 J. PUB. LAW 387, 393 (1956); Williams & Nehemkis, supra
note 65, at 189. See Foley, Some Recent Developments in the Law Relating to
Municipal Financing of Public Works, 4 FORDHAM L. REV. 13, 28 & n.73 (1935), for a list
of states accepting or rejecting the doctrine. See also Williams & Nehemkis, supra, at
192-200, for exceptions to the special fund doctrine that may have some vitality.
By 1951 all but seven states had passed legislation authorizing counties and
municipalities to issue revenue bonds. COUNCIL REPORT, supra note 9, at 27. Michigan
has an interesting provision in its revenue-bond law whereby cities or counties can
issue such bonds without voter approval unless a petition is signed by 10 per cent of
the voters within 30 days after notice of the proposed bonds is given by newspaper
publication. MicH. COMP. LAws ANN. 141.133 (1967).
In a number of states, counties and municipalities can finance services with addi-
tional property taxes without creating special districts through a statutory analogy to
the special fund doctrine--"special taxing districts." GOVERNMENTAL ORGANIZATION,
supra note 10, at 13, reports that 5,910 such special taxing districts exist in 21 states.
See, e.g., CAL. GovT. CODE 60000-163 (West 1966), as amended, CAL. Govr. CODE
60000 (West Supp. 1973).
180. Compare Kelley v. Earle, 320 Pa. 449, 182 A. 501 (1936) leasebackk contract im-
permissible) with Kelley v. Earle, 325 Pa. 337, 190 A. 140 (1937) (straight lease permis-
sible). See generally COUNCIL REPORT, supra note 9, at 95-100; Gerwig, supra note 179,
at 393-95; Magnusson, Lease-Financing by Municipal Corporations as a Way Around
Debt Limitations, 25 GEo. WASH. L. REV. 377 (1957); Morris, supra note 65, at 250-63;
Comment, supra note 176.
181. See, e.g., Opinion of the Justices, 330 Mass. 713, 724-25, 113 N.E.2d 425, 468-69
(1953): Opinion of the Justices, 103 N.H. 258, 169 A.2d 634 (1961); New Jersey Sports
& Exposition Authority v. McCrane, 119 N.J. Super. 459, 472-93, 292 A.2d 580, 589-91
(1971); Paine v. Port of Seattle, 70 Wash. 294, 127 P. 580 (1912).
S 182. See, e.g., Kennchec Water Dist. v. City of Waterville, 96 Me. 234, 52 A. 774
V (1902) Allydon Realty Corp. v. Holyoke Housing Authority, 304 Mass. 288, 23 N.E.2d
665 (1939); Bnhnke v. New Jersey lwy. Authority, 13 N.J. 14, 29-30, 92 A.2d 647, 654-55
(1953).









Comments


has been greatly extended beyond the traditional class of "overn-
mental" endeavors,183 so authorities constructed for such operations
as transportation facilities, housing projects, industrial development
parks, and even recreation facilities8 have survived this line of
attack.1xs
T other constitutional objections against state-created authorities
that have met with little success in the courts include the arguments
that authorities violate "home rule" provisions,1'6 that they constitute
an improper delegation of legislative powers'187 that they voltp
hibitions on the use of special acts where general acts could be 2SMd s18
and that the legislature has no power to create novel forms of local
government.'s8
Since multicounty authorities, unlike traditional authorities, reX
in part on tax funds, those multicounty authorities governd by
appointed officials may also be faced with a "taxation without rep-
resentation" argument that has previously been urged only against
special districts. This challenge, however, has met with a cool re-
ception inthe courts. One response of the courts has been to reject
outright the notion that there exists any constitutional right to
vote for the officials who impose taxes.190 Another response is to

183. Note, supra note 64, at 125-29. See also Recent Development, "Public Purpose"
in Municipal Financing Plans, 42 WASH. L. REv. 294 (1966).
184. See New Jersey Sports & Exposition Authority v. McCrane, 119 N.J. Super. 457,
292 A2d 580 (1971).
185. Note, supra note 64, at 125-29.
186. See, e.g., Santa Barbara County Water Agency v. All Persons & Parties, 47 Cal.
2d 699, 306 P.2d 875 (1957); Metropolitan Transp. Authority v. County of Nassau, 28
N.Y.2d 385, 271 N.E.2d 213, 322 N.Y.S.2d 228 (1971); Gaynor v. Marohn, 268 N.Y. 417,
198 N.E. 13 (1935); Municipality of Metropolitan Seattle v. City of Seattle, 57 Wash. 2d
-446, 357 P.2d 863 (1960). But see People ex rel. Board of Park Commrs. v. Common
Council of Detroit, 28 Mich. 228 (1873); State ex rel. Gerry v. Edwards, 42 Mont. 135,
111 P. 734 (1910). This argument was discussed in Brooks, The Metropolis, Home Rule,
and the Special District, 11 HASTINGS L.J. 110 (1959). On "home rule" in general, see Mac-
chiarola, Local Government, Home Rule and the Judiciary, 48 J. URBAN L. 335 (1971);
Vanlandingham, Municipal Home Rule in the United States, 10 WM. & MARY L. REV.
269 (1968).
187. See, e.g., Application of Okla. Turnpike Authority, 221 P.2d 795, 203 Okla.
335 (1950); Kelley v. Earle, 325 Pa. 337, 190 A. 140 (1937); Tranter v. Allegheny County
Authority, 316 Pa. 65, 173 A. 289 (1934); Clarke v. South Carolina Pub. Serv. Authority,
177 S.C. 427, 181 S.E. 481 (1935).
188. See, e.g., Wilson v. Board of Trustees of Sanitary Dist., 133 Ill. 443, 27 N.E. 203
(1890); Huron-Clinton Metropolitan Authority v. Boards of Supervisors, 300 Mich. 1,
1 N.W.2d 430 (1942).
189. See, e.g., People ex rel. Witson v. Salomon, 51 111. 37 (1869); People ex rel.
Wood v. Draper, 15 N.Y. 532 (1857); Brockenbrough v. Board of Water Commrs., 134
.C. 1, 12-13, 46 S.E. 28, 33-34 (1903).
190. See, e.g., State ex rel. Bryant v. Akron Metropolitan Park Dist., 120 Ohio St.
464, 433, 166 N.E. 407, 413 (1929): "We are not, however, able to find an proision in
the rOhioI Constitution which limits the power to levy tax In 4 ette( l onhcalas s is-
tngut shed from those who ofl e." a lso Golden (;ate Brldge & IIwy.
ist. e. t l. 38 5 P.2d 585 (1931); City of Pasadena v. Chamberlain, 204 Cal.


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hold that voter approval of the creation of the district is a sufficient
substitute for the election of its officials.109 One early case Van
Cleve v. Passaic Valley Sewerage Commissionerst1 d that
the New lersev legislature could not constitutionallv delegate dis-
cretion to determine the amount of taxes to be levied to a sewerage
district that previously had "no governmental functions."'10 How-
\ver, such a body would not receive a similar characterization to-
day.'94 In addition, the Passaic Valley court was particularly worried
by the commissioners' almost unlimited discretion as to the amount
of tax to be levied,'19 while modern special government legislation
very carefully limits the permissible rate of taxation.190 As a result,
the Passaic Valley case does not pose a substantial threat to the
taxing power of special governments.
Two of the multicounty authorities discussed above have been
challenged on constitutional grounds with predictable lack of success.
In City of Rye v. Metropolitan Transportation Authority,'19 it was
argued that the creation of the MTA was not by "special act" as re-
quired by the constitution of New York because the creating statute
dealt with other matters as well. The court held that the constitu-
tional provision meant only that such a public corporation must be
created by the state legislature itself, rather than by a local gov-
ernment or an administrative officer.198 In another attack on the
MTA, Metropolitan Transportation Authority v. County of Nas-
sau,199 the court held that the MTA is not a "super-local govern-
ment" with an unconstitutional power to tax because it merely
collects charges as empowered by the legislature. Further, the MTA
does not violate the constitution's "home rule" provision, for it affects
a large portion of the state.200 The MBTA has also survived consti-
tutional attack, in Massachusetts Bay Transportation Authority v.
653, 269 P. 630 (1928); Wilson v. Board of Trustees of Sanitary Dist., 133 111. 443, 27
N.E. 203 (1890).
191. See, e.g., City of Lehi v. Meiling, 87 Utah 237, 48 P.2d 530 (1935); Municipality
of Metropolitan Seattle v. City of Seattle, 57 Wash. 2d 446, 357 P.2d 863 (1960).
192. 71 N.J.L. 574, 60 A. 214 (1905).
193. 71 N.J.L. at 583, 60 A. at 217.
194. See, e.g., Neuenschwander v. Washington Suburban Sanitary Commn., 187 Md.
67, 48 A.2d 593 (1916); Hampton Roads Sanitary Dist. Commn. v. Smith, 193 Va. 371,
86 S.E. 497 (1952).
195. 71 N.J.L. at 585, 60 A. at 216.
196. See, e.g., CAL. PUB. UTIL. CODE 29120-31 (West 1965).
197. 24 N.Y.2d 627, 249 N.E.2d 429, 301 N.Y.S.2d 569 (1969).
198. 24 N.Y.2d at 634, 249 N.E.2d at 432, 301 N.Y.S.2d at 572-73.
199. 28 N.Y.2d 385, 271 N.E.2d 213, 322 N.Y.S.2d 228 (1971).
200. 28 N.Y.2d at 390-91, 271 N.E.2d at 214-15, 322 N.Y.S.2d at 230-31. The court also
rejected the argument that the MTA is an improperly created state agency that un-
constitutionally disburses money without legislative appropriation. 28 N.Y.2d at 390,
271 N.E. at 214-15, 322 N.Y.S.2d at 230.


[Vol. 71:1376


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Boston Safe Deposit & Trust Co.,201 where the Supreme Judicial
Court of Massachusetts held, among other things,"22 that the provi-
sions for the apportionment of the net transportation costs among
the constituent cities and towns are reasonable "deviations from an
ideal apportionment plan" in view of the cost and complexity of
alternative schemes.203 It was also decided that the statute does not
entail a forbidden loan of credit to private parties because the
benefit, if any, to private transportation companies is indirect and
incidental.204
Authorities have thrived in the face of a barrage of constitutional
objections. Although an occasional court frowns upon a certain au-
thority, and although each new authority must almost invariably
run the gauntlet of constitutional attacks, the constitutionality of the
device is now firmly established in most states.20

B. One Person-One Vote
Although authorities may withstand attacks on their existence
brought under state constitutions, the possibility must be considered
that a particular form of electoral control over these bodies is man-
dated by the federal constitution under the one person-one vote
doctrine. The Supreme Court first articulated the principle that elec-
toral districts must be apportioned as nearly as possible on an equal
population basis in the well-known cases of Baker v. Carr,20 WVes-
berry v. Sanders,207 and Reynolds v. Sims,208 which were concerned
with congressional and state legislative districts.209 Several cases in-
volving various kinds of local governments have developed the prin-
ciple in holdings relevant to public authorities.210
201. 348 Mass. 538, 205 N.E.2d 346 (1965). See also Town of Milton v. Massachusetts
Bay Transp. Authority, 356 Mass. 467, 253 N.E.2d 844 (1969) (dealing with procedures
followed by the advisory board).
202. The court also ruled that the purposes of the statute, the statutory standards
for Authority action, and the provisions for borrowing money are constitutional. 3418
Mass. at 542-57, 205 N.E.2d at 350-59.
203. 348 Mass. at 562, 205 N.E.2d at 362.
204. 348 Mass. at 558, 205 N.E.2d at 360.
205. See COUNCIL REPORT, supra note 9, at 101. But see Quirk & Wein, supra note
3, at 579-80 n.347, 597, who conclude, after an extensive analysis of the New York expe-
rience, that authorities are created for anti-democratic purposes and are unconstitutional
in a variety of ways.
206. 369 US. 186 (1962).
207. 376 U.S. 1 (1964).
208. 377 U.S. 533 (1961).
209. See generally Aucrbach, Reapportionment Cases: One Person, One Vote-One
Vote, One Value, 196G. Str. Cr. REv. 1; Sickels, Dragons, Bacon Strips and Dumbbells
-Who's Afraid of Reapportionment?, 75 YALE L.J. 1300 (1966); Rtcapportionminnt .ys-
posiuin, 63 MNlc. L. REv. 209 (1961); Comment, Legislative Reappottionmient-The
Scope of Federal Judicial Relief, 1965 DUKE L.J. 563; Note, Reapportionment, 79 IARV.
L REV. 1226 (1966).
210. The applicability of the one person-one vote doctrine to local governments in


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Two 1967 cases"' hint that there will be a greater tolerance when
local, rather than congressional and state, legislative districts are in-
volved."-' SSailors v. Board of Educnation'-'2 involved county school
boards the members of which were chosen by delegates from local
school boards. Each local board was elected by popular vote and, re-
gardless of the population it represented, sent one delegate to the
selection meeting. The court characterized this system of selection as
"basically appointive rather than elective" since the county board
members were selected, not by the general electorate, but by the
delegates from local school boards without regard to the wishes of
the electorate."' Because no election was involved, the principle
of one person-one vote was held inapplicable. And since the board
was found to perform "essentially administrative" functions215 the
Court held that the state was free to choose among methods of
selecting its officials: "We find no constitutional reason why state
or local officers of the nonlegislative character involved here may
not be chosen by the governor, by the legislature, or by some other
appointive means rather than by an election."210 The Court em-
phasized the importance to local governments of flexibility in deal-
ing with changing urban conditions.217 The question of whether a
state is required to provide for the election of a local legislative
body rather than for its appointment was not decided.218

general has received substantial attention. See, e.g., Hcrget, The Impact of the Four-
teenth Amendment on the Structure of Metropolitan and Regional Governments, 23
IIASTINcs L.J. 763 (1972); Weinstein, The Effect of the Federal Reapportionment Deci-
sions on Counties and Other Forms of Municipal Government, 65 COLUM. L. REV. 21
(1965); Symposium-One Man-One Vote and Local Govcrnment, 36 GEO. WASH. L REV.
689 (1968); Note, Reapportionment on the Sub-State Level of Government: Equal Rep-
resentation or Equal Vote?, 50 B.U. L. REV. 231 (1970); Comment, The Impact of Voter
Equality on the Representational Structures of Local Government, 39 U. Cm. L. REV.
639 (1972).
211. Sailors v. Board of Educ., 387 U.S. 105 (1967); Davis v. Dusch, 387 U.S. 112 (1967).
212. See also Abate v. Mundt, 403 U.S. 182 (1971), in which a deviation of 11.9 per
cent from exact equality in district population was allowed a county board of supervi-
sors. In fact, Mahan v. Howell, 410 U.S. 315 (1973), which allowed a 16 per cent popula-
tion variation in regard to the Virginia General Assembly on the ground that it re-
sulted from the state's rational objective of preserving the integrity of the boundaries
of political subdivisions, made it clear that the requirements of the one person-one
vote doctrine are less strict even when applied to state, as opposed to congressional,
districts.
213. 387 U.S. 105 (1967).
214. 387 U.S. at 109-10 & n.6.
215. The board's powers did, however, include preparing an annual budget and levy-
ing taxes. 387 US. at 110 n.7.
216. 387 US. at 108 (emphasis added). The Court did note, however, that a state
could not "manipulate its political subdivisions so as to defeat a federally protected
right, as, for example, by realigning political subdivisions so as to deny a person his
vote because of race." 387 U.S. at 108.
217. 387 U.S. at 110-11.
218. 387 U.S. at 109-10.


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Vn Dusch v. Davis,219 decided on the same day as Sailors, the Su-
preme Court upheld a plan for the consolidation of thrce urban and
four rural boroughs that provided that the eleven councilmen of the
resulting city were all to be elected at large, while each of the city's
seven boroughs, which varied considerably in population, was to be
the residence of at least one councilman. Although the Court assumed
areuendo that the one person-one vote principle required by Reyn-
olds governed municipal legislative bodies, the residence require-
ment was not found to be fatal. The consolidation plan, the Court
said, used boroughs 'merely as the basis of residence for candidates,
not for voting or representation,' "220 since the affected councilmen
were responsible to the entire city electorate rather than to the resi-
dents of the borough in which they resided.221 As in Sailors, the Court
recognized the need for flexibility in local government: "The Seven-
Four Plan seems to reflect a detente between urban and rural commu-
nities that may be important in resolving the complex problems of
the modern megalopolis in relation to the city, the suburbia, and the
rural countryside."222
/ However, in Avery v. Midland County,223 the Court for the first
time squarely applied the one person-one vote doctrine to local gov-
ernments. The Court held unconstitutional a plan whereby each of
four districts in Midland County, Texas, elected one commissioner
to the County Commissioners Court, the governing body of the
county, when one of the districts contained over ninety-five per cent
of the county's population.224
Distinguishing "special-purpose" governmental units, the major-
ity opinion by Justice White said, "Our decision today is only that
the Constitution imposes one ground rule for the development of
arrangements of local government: a requirement that units with
general governmental powers over an entire geographic area not be
apportioned among single-member districts of substantially unequal
population."225 Noting such powers as taxation, bond issuing, and
219. 387 U.S. 112 (1967).
220. 387 US. at 115, quoting Fortson v. Dorsey, 379 U.S. 433, 438 (1965).
221. The Court suggested that a different result might ensue if a councilman in fact
represented only one borough, if the plan were a scheme to avoid the consequences of
reapportionment, or if it cancelled the voting strength of racial or political elemcinlcts.
387 US. at 116-17. See also White v. Regester, 41 US.L.W. 4885 (US., June 18, 1973).
222. 387 U.S. at 117.
223. 390 US. 474 (1968).
224. The fact that the state legislature that created the districts might be prolprly
apportioned was of no iclevance to the question of whether the districts met the equal
representation test. 390 U.S. at ,181.
225. 390 U.S. at 485-86. The Court also rejected the argument that the Commission-
ers Court's functions were more "administrative" than "legislative" andl tlhult n,.l not
be equally apportioned. 390 U.S. at 482-85, even though the Texas supreme courn had
found that the Irgislative functions of this body were "negligible," Avery v. Midlanld
County, 406 S.W.2d 422. 426 (1966).


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Michigan Law Review


bud-et-making. the Court concluded that the Commissioners Court
was such a body.22-
Again emphasizing the complexity of local government, the Court
issued a caveat: "Were the Commissioners Court a special-purpose
unit of government assigned the performance of functions affecting
definable groups of constituents more than other constituents, we
would have to confront the question whether such a body may be
apportioned in ways which give greater influence to the citizens most
affected by the organization's functions."227 However, Justices Harlan
and Fortas, in separate dissents, were not convinced by the Court's
distinction between special-purpose units and those with "general
governmental powers."228 Justice Harlan foresaw "undesirable 'freez-
ing' effects on local government," such as the hindrance of the devel-
opment of metropolitan governments based on a compromise between
central city and suburban representation.229 Justice Fortas felt that
the distinction between special-purpose and general governments was
not justified by the difference in their powers: "The functions of
many county governing boards, no less than the governing bodies of
special-purpose units, have only slight impact on some of their con-
stituents and a vast and direct impact on others."230
The prediction of the dissent that the logic of Avery could not be
restricted to general-purpose governments appears to have been ful-
filled in Hadley v. Junior College District,231 where the Court held,
"as a general rule," that the one person-one vote doctrine applies to
any state or local governmental unit that selects its officials by elec-
tion.232 In that case, the Court upheld a challenge brought by resi-
dents of a Kansas City junior college subdistrict that contained ap-
proximately sixty per cent of the district population to a statutory
apportionment plan that permitted them to elect only fifty per cent
of the college's trustees. The Court did not wholly abandon the
Avery test:233 "We feel that these powers, while not fully as broad as
those of the Midland County Commissioners, certainly show that the

226. 390 US. at 483-84.
227. 390 US. at 483-84.
228. Justice Harlan, for example, called the Commissioners Court "slightly special-
ized." 390 U.S. at 492.
229. 390 US. at 492-94.
230. 390 US. at 500.
231. 397 US. 50 (1970).
232. 397 US. at 56.
233. 397 US. at 53-54. It is arguable that Hadley is not as great an extension of
Avery as it might seem. The court in Hadley does mention the special status of educa-
tion; perhaps the election of the junior college trustees could be said to be as important
to the Kansas City voters as the election of county commissioners was to the Midland
voters in Avery. The Court's opinion notes, however, that it would be impossible to try
to determine how important an individual election is to the average voter. 397 U.S. at
54-56. See also Comment, supra note 210, at 647 n.54.


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June 1973]


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1407


trustees perform important governmental functions within the dis-
tricts, and we think these powers are general enough and have suffi-
cient impact throughout the district to justify the conclusion that the
principle which we applied in Avery should also be applied here."
However, the language of Hadley suggests that the Court puts
little weight on the "general governmental powers" characterization.
In Hadley the existence of an election was emphasized, not its pur-
pose. The majority rejected any test based upon the "importance"
of an election, feeling that the decision of the state to choose an
official by election is sufficient indication of his importance.34 It
also refused to distinguish between "legislative" and "administra-
tive" officials.235 Justice Black, for the majority, did leave a small
crack in the door for "certain functionaries whose duties are .
far removed from normal governmental activities and dispro-
portionately affect different groups .... .236 Moreover, the Dusch
approach in at-large elections with limited residency restrictions and
the Sailors approach where officials are appointed were cited with
approval.237 But, after Hadley 38 the conclusion is hard to resist
that once a state decides to elect officers, equality of voting power
is required for almost any unit of local government.239
234. 397 U.S. at 55.
235. 397 US. at 55-56.
236. 397 US. at 56.
237. 397 US. at 58-59.
238. Justice Harlan, again in dissent, stated that the decision forebodess, if indeed
it does not decide, that the rule is to be applied to every elective public body, no matter
what its nature." 397 U.S. at 60. He further argued that the need for local flexibility at
least suggests that the Avery test be retained and that the Court from time to time face
difficult issues of what are general governmental powers. 397 US. at 61-63.
239. In two recent cases, the Supreme Court has indicated that the nature of a par-
ticular special government may justify the election of its officials by only a certain seg-
ment of the population despite the one person-one vote doctrine. In Salyer Land Co. v.
Tulare Lake Basin Water Storage Dist., 410 U.S. 719 (1973), the Court, relying on the
exception noted by Justice Black in Hadley, 410 U.S. at 727-28, quoting 397 U.S. at 56
(see text accompanying note 236 supra), upheld a plan whereby only landowners were
permitted to vote for the directors of the District and where the number of votes
possessed by each landowner was proportionate to the assessed value of his land. Justice
Rehnquist, for the majority, pointed out that the activities of the District had a dis-
proportionate effect upon landowners as a class and also that the District had a special
limited purpose. 410 U.S. at 728. Despite its powers to plan and execute projects "'for
the acquisition, appropriation, diversion, storage, conservation, and distribution of
water,'" 410 US. at 723, quoting CAL. WATER CODE 42200 (West 1966), and its ability
to fix charges for the use of water and assess the costs of its projects against district land.
410 U.S. at 724, he characterized the District as without "normal governmental" at-
thority: "It provides no other general public services such as schools, housing, tralslpor-
tation, utilities, roads or anything else of the type ordinarily financed by a municipal
body .... There are no towns, shops, hospitals or other facilities designed to imnlolie
the quality of life within the district boundaries and it does not have a lire departmtntI
police, buses, or trains." 410 U.S. at 728-29. Justice Douglas, with whom Justices Bren-
nan and Marshall concurred, dissented strongly in Salyer and its companion (:ise.
Associated Enterprise, Inc. v. Toltec Wateished inpioveinent Dist., 410 I'.S. 743 (197:.)
arguing that the tests laid (lown in Avery and Hadley of "performn[ing] important gov-










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[Vol. 71:1376


Taking these cases together, it is clear that, although not all the
questions are answered, the one person-one vote doctrine applies to
Ilnany authorities. Its application will depend on whether or not the
officials in question are elected. If an authority elects any ot its direc-
tors, Hadley would seem to require that there be equal representa-
tion from constituent units.240 The powers of most authorities over
such services as water supply, transportation, and pollution control
will be at least as great as those of the Midland County Commission-
ers Court or the Kansas City Junior College District and will thus be
considered "general governmental powers," if that concept retains
any vitality.241 Not even all authorities that do elect some officials,
however, need worry about apportionment standards; their directors
may well be elected at large. Moreover, under Dusch an authority
embracing several counties or cities within a single county can appar-
ently elect its directors at large and yet impose certain residency re-
quirements.2" Thus, it is probable that only those authorities with
elected directors that represent constituent counties or cities are re-
quired to apportion.
The application of the one nerson-one vote doctrine to multi-
county authorities, which by defintinn are composed of constituent
arts, may threaten various accommodations that might be worked
out between the central city and siirro flldino gi.hrhi n nr r..-..1
areas.' Suppose, for instance, that the advisory board of the Mas-

ernmental functions .hav[ing] sufficient impact throughout the district" were met
by these special districts. 410 U.S. at 749, quoting Hadley, 397 U.S. at 53-54 (emphasis
added by Toltec dissent).
240. That is to say, either the districts from which officials are elected must be ap-
proximately equal in population, or, perhaps, if officials are from districts of varying
population, their votes must be weighted according to how many people they represent.
In 1967, it was estimated that only 25 per cent of "local governing boards" were elected
from districts or elected at large subject to district residence requirements. Avery v.
Midland County, 390 U.S. 474, 482 n.7 (1968), quoting Brief for the United States as
Amicus Curiae at 22 n.31, Sailors v. Board of Educ., 387 U.S. 105 (1967).
241. It might be suggested that certain specialized authorities qualify for the one
person-one vote loophole in Tulare Lake for units "far removed from normal govern-
mental activities and disproportionately affect[ing] different groups." 410 US. at
927-28, quoting Hadley, 397 U.S. at 56. This loophole is probably illusory, however, in
cases dealing with whether equal weight must be given to votes cast from different areas,
rather than, as in Tulare Lake, with whether the vote may be limited to certain classes
of voters. Any activity undertaken on a scale that entails representation from a number
of different districts is unlikely to be characterized as lacking sufficient general impact.
At any rate, none of the metropolitan multicounty authorities discussed above could be
so characterized.
242. In White v. Regester, 41 U.S.L.W. 4885, 4889 & n.10 (U.S., June 18, 1973), the
Court indicated that such an arrangement might even be preferred if in its absence
"opportunity for racial discrimination" might be enhanced because all candidates could
be selected from the majority areas.
2t3. This was suggested by the dissents in Hadley, 397 U.S. at 60-61 (Harlan, J.), and
Avery. 390 U.S. at 490-94 (Harlan, J.).


1E__I___~_ __ I__~_ __









Comments


sachusetts Bay Transportation Authority241 were its governing body.
As the board now stands, with each of the cities and towns having
at least one vote plus additional votes and fractions based upon
population,245 Boston has 73.29 votes out of a total of 195. Under
a strict one person-one vote calculation, roughly estimated by sub-
tracting one vote from each city's allocation, leaving only the amount
based upon population, Boston would have 72.29 votes of a total
of 117. The consequent dominance of Boston might make the sur-
rounding cities think twice before they joined the Authority. Nor
is it difficult to imagine similar situations in which compromise
efforts at metropolitan governance would be politically impossible
under the one person-one vote doctrine.240 As a practical matter,
it does not seem improbable that some state legislatures will regard
the circumvention of the complications of metropolitan representa-
tion as one reason for making the positions in areawide authorities
appointive rather than elective.247
The ways in which authorities that have no direct popular elec-
tions select their directors must be evaluated individually. Under
Sailors most, if not all, of the authorities with appointed dire-
tors would avoid apportionment problems.248 In addition, a plan
such as that provided for BARTD,241 whereby elected local officials
from several constituent areas of varying size select authority direc-
tors, would seem to be appointive by analogy to Sailors.20 A system
of appointment of directors combined with a residency requirement
would not appear to violate the one person-one vote doctrine by
analogy to the at-large elections in the Dusch case.25
The practice of making certain elected officials ex officio members
of authority boards252 raises a problem of characterization. If the
mayors of the cities within a county automatically become members
244. See text accompanying notes 130-37 supra.
245. The vote allocation procedure is described in text accompanying note 137 supra.
246. See, e.g., Huston, Special Service Districts in a City-County Consolidation: Con-
flict Between Metropolitan Reform and "One Man-One Vote" in Indianapolis, 47 IND.
LJ. 101 (1971).
247. But see McKay, Reapportionment and Local Government, 36 GEO. WASH. L.
REV. 713, 731-32 (1968).
248. In 1965, it could perhaps be said that it was "rather farfetched" to argue that
appointed officials should come from constituent areas of nearly equal population, be-
cause authorities then typically relied solely on user charges. Weinstein, supra note 210,
at 34. This argument is no longer quite so strained because of the appearance of multi-
county authorities financed by property taxes and/or state funds as well as user charges.
249. See text accompanying notes 148-49 supra.
250. Compare text following note 213 supra.
251. Such a system has been upheld by a court relying on Sailors. See People ex rel.
Younger v. County of El Dorado, 5 Cal. 3d 480, 487 P.2d 1193, 96 Cal. Rptr. 553 (1971).
252. See COUNCI. REPORT, supra note 9, at 42-44; Tobin, supra note 36, at 148.


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[Vol. 71:1376


of the board of a countywide authority, are they appointed or
elected?2"3 It may be that elected ollicials from various cities or coun-
ties are made directors of an authority that embraces them all because
they are expected to represent their constituencies, in which case
the one person-one vote principle should apply because they are,
in effect, elective."54 This situation is unlike Sailors, where elected
local officials selected county board members without regard to the
wishes of the electorate. The Court characterized the system in
Sailors as appointive because "the county board is not determined,
directly or indirectly, through an election in which the residents of
the county participate."'55 When local officials automatically become
directors, an election by the local residents is determinative of the
position, which ought therefore to be characterized as elective.250
Given the variety of organizational forms used bv authorities,
special nrolobms are inevitable. For instance, if major new capital
projects, bond issues, and tax changes undertaken by an authority
must be approved by the general electorate-'57 the case for applying
the one person-one vote principle is not so compellina.258 Division
ot powers among an authority, a state, and affected local govern-

253. In Bergerman v. Lindsay, 25 N.Y.2d 405, 255 N.E.2d 142, 306 N.Y.S.2d 898 (1969),
cert. denied, 398 U.S. 955 (1970), where elected presidents of boroughs of varying popu-
lation were made ex officio voting members of a board of estimate, the New York Court
of Appeals upheld the arrangement, but on the pre-Hadley ground that the board did
not have general governmental powers. The court did not reach the issue of whether
the board members were "elected" or "appointed." See also Cohen v. Hoye, 280 A.2d
778, 783-84 (Me. 1971); Meadowlands Regional Dcv. Agency v. State, 112 N.J. Super. 89,
270 A.2d 418 (1970).
254. A system of weighted votes or some similar plan might then be necessary to
assure equal representation. See Dixon, Rebuilding the Urban Political System: Some
Heresies Concerning Citizen Participation, Community Action, Metros, and One Alan-
One Vote, 58 GEo. L.J. 955, 979-80 (1970); Weinstein, supra note 210, at 40-49; Note,
supra note 210, at 260.
As a practical matter, however, it could be that appointments are made ex officio,
not because elected officials represent the respective interests of their constituencies, but
because it is an easy, shortcut method of appointing presumably competent people.
255. 387 U.S. at 109-10 n.6.
256. The same argument suggests that whenever a local elected official has the power
to appoint a member of an authority and when the board of directors is made up of a
number of similarly appointed directors from constituent cities or counties, then the one
person-one vote principle should apply because each appointee theoretically represents
his governmental unit. This is to be distinguished from the situation in which one
elected official, such as the mayor, has the power to appoint all the directors of a city
or county authority. Here the mayor is presumably representing all the people of his
city, so no one person-one vote problems arise. The latter situation is analogous to ap-
pointment by the governor or the state legislature; when the appointer represents all
the people of the jurisdiction over which the authority is given power and not just a
component, smaller unit, the one person-one vote principle should be inapplicable.
257. Bond issue approval is required in BARTD. See text accompanying note 146
supra.
258. For one thing, this would leave the authority with independent responsibility
only for operating facilities, rather than for planning them, and would cut against
finding the authority to be so "governmental" that its directors must be elected.









June 1973] Comments 1411

ments could also prove troublesome. In the MBTA, for instance,
the advisory board, composed of ex officio members, approves one
director appointed by the governor,'20 a power that probably does
not raise one person-one vote problems. However, the board also
has more substantive powers, such as veto power over the Authority's
budget, its program for mass transportation, and its fare changes.200
Can it be said that the one person-one vote principle applies to a
body staffed with ex officio members that has veto powers over an
authority with appointive directors?
In addition to the problems that arise under a given selection
system, there is the further issue of when, if ever, the officials of a
given government must be elected rather tlan anointed. It seems un-
likely that a state lecrislatre would ever attempt to change tradition-
ally elective city or county offices into annointive ones. However. the
same effect could be achieved by the creation of a multicounty au-
hority that has appointed directors and broad powers approaching
those of a general government. In Sailors, the Supreme Court held
that the officers of an "admi;-;,, ," hEncy nrP ,,r h. ,,-,rtpA- hut
reserved this question as to a "legislative" body.201 The Avery court,
however, touna tis dstinction difficult to apply.20" A more useful
distinction may be that discussed in Avery, between general govern-
mental and special powers.203 Although Hadley may have devalued
this test for purposes of deciding which elections require the ap-
plication of the one person-one vote principle, it may yet be useful
in determining whether some offices must be elective. It is one
thing to say that a legislature need not provide for the election of
a director of an authority the only specific responsibility of which
is managing the waterworks; it is another thing entirely to con-
clude that the legislature can do this in the case of a director of an
authority that can promulgate rules, assess taxes, exercise the power
of eminent domain, direct its own police force, and plan economic
development over a metropolitan area.264 This issue is likely to be

259. See note 128 supra.
260. See text accompanying notes 130-33 supra.
261. 387 U.S. at 109-10.
262. 390 US. at 482.
263. 390 U.S. at 483-85.
264. The constitutional guarantee of a republican form of eovcnment in article IV,
Section 4, applies only to the states and probably could not be used to argue that a state
has no por to prove for th appoiilicrit rather thin fholin f oials ho
Exercise full governmental powers at the local level. See O'Neill v. Learner, 239 U.S. 2.14
(M91S). Other arguments could be made, however. For cxamplc. doItrine of inherent
right to local 'If-ridle was onIce a(lvanced anil |1i't '""r" vI Sc," gcitrally Eaton, The
igni to Local Self Government (pts. 1-3), 13 llARV. L. REV. 4'11, '70, 6:18 (1900); McBain,
The Doctrine of an Inherent Right of Local Self Government, 16 COLUM. L. REV. 190
(1916).


u-u~~rr*-r-;- **;i---.x ........ ...., ll- ~iiU--


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raised in the context of multicounty authorities,260 especially if they
evolve into multifunctional authorities.

C. Sovereign Immunity in Tort

Once the constitutionality of the existence and organization of a
special government has been established, the question arises of
whether such a body partakes of certain immunities granted to gen-
eral governments. For instance, many courts have assumed that in
the absence of a "sue and be sued" clause in its creating legislation,
an authority is entitled to a full measure of sovereign immunity.266
However, most creating legislation enables authorities to sue and be
sued,267 and an issue of sovereign immunity arises in determining
whether this provision allows only contract actions or tort claims as
well.2o0
In one line of cases, which emphasize that special governments
are part of the governmental structure, the courts appear reluctant to
depart from older holdings that "sue and be sued" clauses for execu-
tive agencies and departments permit suits for breaches of contract
but not for torts, unless the clause is accompanied by an explicit
waiver of tort immunity.269 In Masse v. Pennsylvania Turnpike Com-
mission,270 a personal injury suit, the Commission argued that it was
immune from suit as an instrumentality of Pennsylvania.271 The
265. The argument that the appointment of the MTA directors violated the one
person-one vote doctrine was rejected in Metropolitan Transp. Authority v. County of
Nassau, 28 N.Y.2d 385, 271 N.EL2d 213, 322 N.Y.S.2d 228 (1971). The court stated that
there is no constitutional requirement that members be elected rather than appointed,
apparently having in mind the principle that the one person-one vote doctrine does not
apply to appointed officials. 28 N.Y.2d at 390, 271 N.E.2d at 214, 322 N.Y.S.2d at 230.
266. See, e.g., Petty v. Tennessee-Missouri Bridge Commn., 359 US. 275 (1959); Taylor
v. New Jersey Hwy. Authority, 22 N.J. 454, 126 A.2d 313 (1956). Before the Port of New
York Authority gave its consent to suit, several cases held that the Authority had
sovereign immunity. See Howell v. Port of N.Y. Authority, 34 F. Supp. 797 (D.N.J.
1940); Marmor v. Port of N.Y. Authority, 203 Misc. 568, 116 N.Y.S.2d 177 (Sup. Ct. 1952);
LeBeau Piping Corp. v. City of New York, 170 Misc. 664, 9 N.Y.S.2d 853 (Sup. Ct. 1938);
Voorhis v. Cornell Contracting Corp., 170 Misc. 644, 10 N.YS.2d 378 (N.Y. City Ct. 1938).
267. See, e.g., text accompanying note 37 supra.
268. Rarely, as, for example, in the case of the Port of New York Authority, this is-
sue is settled by an express statutory waiver of all kinds of immunity. See N.J. STAT.
ANN. 32:1-157 (1963); N.Y. UNCONSOL. LAWS 7101 (McKinney 1961). See also MAss. ANN.
LAws ch. 92, 1 15, 36 (1972) (Mass. Metropolitan Dist. Comm.); N.Y. Pun. ALrH. LAW
1276 (McKinney 1970) (N.Y. Metropolitan Transp. Authority); OKLA. STAT. ANN. tit.
69, 1703 (1969) (fact that Oklahoma Turnpike Authority is empowered by statute to
carry liability insurance suggests that tort suits are permitted).
269. See, e.g., Payne v. State Hwy. Commn., 136 Kan. 561, 16 P.2d 509 (1932); .ohr
v. Upper Potomac River Commn., 180 Md. 584, 26 A.2d 547 (1942); Bush v. State Hwy.
Commn., 329 Mo. 843, 46 S.W.2d 854 (1932).
270. 163 F. Supp. 510 (E.D. Pa. 1958).
271. The court held that eleventh amendment immunity was a federal question that
had previously been decided adversely to the Commission. 163 F. Supp. at 511. See also
S.J. Groves & Sons Co. v. New Jersey Turnpike Authority, 268 F. Supp. 568 (D.N.J. 1967),
for a carefully reasoned holding that an authority is not entitled to sovereign immunity
under the eleventh amendment as an alter ego of the state.


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court felt that the Commission was inimune under state law from
liability for its employees' negligent acts unless otherwise provided
by statute. Immunity was expressly waived with regard to damage to
property but not for personal injury, so the suit was dismissed.272
Another line of cases of equal or greater weight has construed the
"sue and be sued" clause as an effective waiver of tort, as well as con-
tract, immunity.273 Petty v. Tennessee-Missouri Bridge Commis-
sion274 involved a suit under the Jones Act against an agency created
by Tennessee and Missouri, with the consent of Congress, under the
interstate compact clause of the Federal Constitution.275 The Supreme
Court, applying federal law, held that the "sue and be sued" clause
that Congress had included in the compact made "it clear that the
States accepting it waived any immunity from suit which they other-
wise might have."276 In Taylor v. New Jersey Highway Authority,277
the Authority defended a negligence action on the ground that tort

272. Accord, Conner v. South Carolina Pub. Serv. Authority, 91 F. Supp. 262 (E.D.S.C.
1950) (dictum): Spahgler v. Florida State Turnpike Authority, 106 S.2d 421 (Fla. 1958):
Miller v. Kansas Turnpike Authority, 193 Kan. 18, 392 P.2d 89 (1964); Hosterman v.
Kansas Turnpike Authority, 183 Kan. 590, 331 P.2d 323 (1958): Miller v. Board of
Commrs., 1 S.2d 97 (La. Ct. App. 1941); Nelson v. Maine Turnpike Authority, 157 Me.
174, 170 A.2d 687 (1961); Rice Hope Plantation v. South Carolina Pub. Serv. Authority,
216 S.C. 500, 59 S.E.2d 132 (1950); Elizabeth River Tunnel Dist. v. Beecher, 202 Va. 452,
117 S.E.2d 685 (1961). The holding in Masse was opposite that of a slightly earlier case,
Linger v. Pennsylvania Turnpike Commn., 158 F. Supp. 900 (W.D. Pa. 1958), which
construed the "sue and be sued" clause .as an effective waiver of all immunity. The
Masse court said of the Linger decision: "[T]hat case finds no rule of decision in the
state law and apparently ignores the explicit language of Section 6(k) of The Turnpike
Extension Acts." 163 F. Supp. at 514. In Rader v. Pennsylvania Turnpike Commn., 407
Pa. 609, 182 A.2d 199 (1962), the state supreme court emphasized the Commission's close
relations with the state and held that it had the same immunity in trespass actions
arising from the negligence of its employees as did the state. For other examples of close
identification of an authority with the state, see Fowler v. California Toll-Bridge Au-
thority, 128 F.2d 549 (9th Cir. 1912); Kansas City Bridge Co. v. Alabama State Bridge
Corp., 59 F.2d 48 (5th Cir. 1932); Easly v. New York State Thruway Authority, 1
N.Y.2d 374, 135 N.E.2d 572, 153 N.Y.S.2d 28 (1956).
273. See, e.g. Gerr v. Emrick, 283 F.2d 293 (3d Cir. 1960), cert. denied, 365 US. 817
(1961); Linger v. Pennsylvania Turnpike Commn., 158 F. Supp. 900 (W.D. Pa. 1958);
Morrison v. Smith Bros., Inc., 211 Cal. 36, 293 P. 53 (1930); Harper v. Vallejo Housing
Authority, 104 Cal. App. 2d 621, 232 P.2d 262 (1951); Muses v. Housing Authority, 83
Cal. App. 2d 489, 189 P.2d 305 (1958); Knowles v. Housing Authority, 212 Ga. 729, 95
S.E.2d 659 (1956); Hoffmeyer v. Ohio Turnpike Commn., 12 Ohio Op. 2d 436, 166 N.E.2d
543 (C.P. Cuyahoga County 1960). See also Dormitory Authority v. Span Elec. Corp.,
18 N.Y.2d 114, 218 N.E.2d 693, 271 N.Y.S.2d 611 (1966) (alternative holding) (sovereign
immunity offers Authority no protection from the effects of an arbitration clause).
274. 359 US. 275 (1959).
275. US. CoNsr. art. I, 10, cl. 3. On the formation of interstate authorities under
the interstate compact clause, see Celler, Congress, Compacts and Interstate Authorities,
26 LAW & CONTEMP. PROIl. 682 (1961); Engdihl, Interstate Urban Areas and Interstate
"Agreements" and "Compacts": Unclear Pos.ibilities, 58 Gro. L.J. 799 (1970); Leach,
Interstate Authorities in the United States, 26 LAw & CON.I MI. I'ROM. 666 (1961).
276. 359 U.S. at 280. See also Federal Housing Administration v. Burr, 309 U.S. 242
(1940); Keifer & Keifer v. Reconstruction Fin. Corp., 306 U.S. 381 (1939).
277. 22 N.J. 454, 126 A.2d 313 (1956).









Michigan Law Review


liability had not been expressly waived. The court disagreed, noting
the "sue and be sued" clause in the Authority Act and remarking
on the disfavor, especially at the federal level, toward the doctrine
of sovereign immunity:278
The hostility towards the doctrine of governmental immunity is also
evidenced in the states and it seems to us that pertinent statutory
waivers should fairly receive as liberal construction in the states as
in the federal sphere. In recent years there has been a noticeable
tendency of legislative bodies to entrust to independent Authorities
functions which necessitate relationships comparable to those ordi-
narily existent between private parties. It would seem that in all jus-
tice such Authorities should generally not be afforded the highly
special immunities of the State acting in its sovereign capacity; that
much has been recognized by the New Jersey Highway Authority
Act, particularly in its broad terminology which unrestrictedly per-
mits the Authority to sue and be sued in its own name.279

The split between courts on the sovereign immunity issue may
not be as deep as it appears. Most courts would agree that a state or
municipality is immune from suit, if at all, only when it acts in a
governmental, as opposed to a proprietary, capacity.280 Logically, a
subdivision such as an authority should have no greater immunity
than a general government. Therefore, even when a court construes
a "sue and be sued" clause to allow sovereign immunity in tort to an
authority, it should look to the nature of the authority's activities
before allowing or disallowing suit. A transit authority, for example,
may be predominantly governmental, and a planetarium authority
predominantly proprietary. Thus, even where there is no statutory
waiver, two questions should be answered affirmatively before im-
munity is allowed: (1) Is the authority sufficiently part of the
sovereign so that sovereign immunity might apply? and (2) If so,
does it carry out governmental, rather than proprietary, functions?
Some courts that answer the first question affirmatively fail to go
on to ask the second.2s8 If the courts that now allow immunity
278. 22 N.J. at 469-70, 126 A.2d at 321-22. See also Indiana Towing Co. v. United
States, 350 US. 61 (1955); Ayala v. Philadelphia Bd. of Pub. Educ., 223 Pa. Super. 171,
297 A.2d 495 (1972); Muskopf v. Corning Hosp. Dist., 55 Cal. 2d 211, 359 P.2d 457, 11
Cal. Rptr. 89 (1961). For other discussions of the waning of the doctrine, see David,
Tort Liability of Governmental Units, 40 MINN. L. REV. 751 (1956); Van Alstyne, Gov-
ernmental Tort Liability: Judicial Lawmaking in a Statutory Milieu, 15 STAN. L REV.
163 (1963); Vanlandingham, Local Governmental Immunity Re-examined, 61 Nw. U. L.
REv. 237 (1966); Comment, The Role of the Courts in Abolishing Governmental Im-
munity, 1964 DUKE L.J. 888.
279. 22 N.J. at 470, 126 A.2d at 322.
280. See C. ANTIEAU, LOCAL GOVERNMENT LAW 11.07 (1955): 2 F. HARPFR &e F.
JAhM:S, TORTS 29.6 (1956); 18 E. McQuiIL.IN, MUNICIPAL CORPORATIONS 53.23 (3d ed.
1963); W. PROSSER, TORTS 131. at 977-S7 (lth ed. 1971).
281. See, e.g., Conner v. South Carolina Pub. Scrv. Authority, 91 F. Supp. 262
(E.D.S.C. 1950); Spanglcr v. Florida State Turnpike Authority, 106 S.2d 421 (Fla. 1958);


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would follow this two-step analysis, their theory would in some
cases converge with that of the courts that construe the "sue and be
sued" clauses to waive immunity, for many of the latter decisions
emphasize the proprietary nature of a given authority's activities
and the anomaly that would result if the authority were to be im-
mune where a city would not.282
The governmental-proprietary distinction for municipal tort
liability, however, is far from satisfactory,283 and its complexities
could be avoided if courts were to decide that authorities are not
entitled to sovereign immunity under any circumstances. Even in the
absence of a statutory waiver of all immunity,284 authorities should
be required to assume liability for their tortious acts and thus bear
the full cost of their operations. Since traditional authorities by defi-
nition rely on revenue bonds for financing, the policy of avoiding a
tort suit that unduly burdens the taxpayers will not be subverted.
Only the users, who, in theory, should pay the full costs of operation
through tolls, and the bondholders, who voluntarily assume the risk
of authority default, would bear the burden. Multicounty authorities,
which to some extent do depend on tax funds, plan and operate
enormous revenue producing enterprises in the manner of private
corporations, and it is similarly appropriate to require them to insure
themselves against liability. Sovereign immunity is not yet unalter-
ably affixed to special governments by history, legislative will, or an
irreversible trend of judicial authority. At a time when the justifica-
tions for the doctrine ring rather hollow even in the case of general
governments, this fading doctrine should not be affixed to authori-
ties.285

'Miller v. Board of Commrs., 1 S.2d 97 (La. Ct. App. 1941); Rice Hope Plantation v.
South Carolina Pub. Serv. Authority, 216 S.C. 500, 59 S.E.2d 132 (1950).
282. As the court said in Morrison v. Smith Bros., Inc., 211 Cal. 36, 293 P. 53 (1930):
It would certainly be an anomalous situation if a municipality engaged in a pro-
prietary function, such as running, operating or constructing water works, would
be liable for the torts of its agents, but if that same municipality should join with
other municipalities and organize a municipal utility district it would thereby
immunize itself from all such liability. Such a rule does not appeal to our sense of
justice nor to our reason.
211 Cal. at 45, 293 P. at 62. For other cases that deny immunity while focusing on the
proprietary function involved, see Gerr v. Emrick, 283 F.2d 293 (3d Cir. 1960), cert.
denied, 365 U.S. 817 (1961); Muses v. Housing Authority, 83 Cal. App. 2d 489, 189 P.2d
305 (1958); Knowles v. Housing Authority, 212 Ga. 659, 95 S.E.2d 708 (1956); Hoffmcycr
v. Ohio Turnpike Commn., 12 Ohio Op. 2d 436, 166 N.E.2d 513 (C.P. Cuyahoga County
1960).
283. See, e.g., 2 F. HARPER :- F. JAMES, supra note 280, at 1622-23; 18 E. MCQUILLIN,
supra note 280, at 53.2 la; W. PROSSER, supra note 280, at 978-86.
284. For express waivers, see statutes cited in note 268 supra.
285. See Note, The Applicability of Sovereign Immunity to Independent Public Au-
thorities, 74 IIARv. L. REV. 714, 724 (1961): "The policies behind sovereign immunity
would not seem to be significantly infringed by a complete refusal to apply the doctrine
to independent authorities."


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D. Reviewability
Beyond inimunity from tort actions, the possibility of court re-
view of the decisions, plans, and activities of authorities remains un-
explored. For example, rate setting by authorities-unlike that by
public utilities-is not supervised by state or federal commissions,
yet courts are unlikely to review authority rate setting other than to
make sure that specified procedures are complied with,28 for the
breadth of the statutory mandate usually makes it difficult to argue
that an authority has exceeded or avoided its responsibilities. The
nature of the proceeding wherein the actions of an authority may be
challenged, when a challenge is allowed, is quite varied287 and in-
cludes the use of extraordinary writs, such as mandamus,288 and de-
claratory judgment actions.-'s
The sovereign immunity doctrine that authorities may be sued
only when they consent will frequently be a stumbling block even in
a nontort action. Thus, one case has held that claims to realty cannot
be adjudicated against an authority where the legislature has waived
immunity only with regard to suits based on torts or breaches of con-
tract;290 another has denied an injunction, holding there is no equity
jurisdiction over an authority without express authorization.291
It might be argued that state administrative procedure acts waive
sovereign immunity and thus make certain activities reviewable, but
the potential for this approach under present acts is small. First, ad-
286. See, e.g., County of Nassau v. Metropolitan Transp. Authority, 57 Misc. 2d
1025, 293 N.Y.S.2d 1017 (Sup. Ct. 1968); Application of Love, 155 N.YS.2d 266 (Sup. Ct.
1956) (court can act if rate arbitrary or capricious). Cf. Massachusetts Bay Transp. Au-
thority v. Boston Safe Deposit & Trust Co., 348 Mass. 538, 549-50, 205 N.E.2d 346, 355
(1965): "The determinations of the Authority, however, as to how to exercise its powers
for the declared public purpose, if within the scope of the delegated power and in con-
formity with the express and necessarily implied statutory requirements, are not to be
set aside by the courts."
287. See generally 2 F. COOPER, STATE ADMINISTRATIVE LAW 602-62 (1965). See also
N.Y. Civ. PRAC. art. 78 (McKinncy 1963).
288. E.g., Faulkner v. California Toll Bridge Authority, 40 Cal. 2d 317, 253 P.2d 659
(1953); Gould v. Greylock Reservation Commn., 350 Mass. 410, 215 N.E.2d 114 (1966);
State ex rel. Shafer v. Ohio Turnpike Commn., 159 Ohio St. 581, 113 N.E.2d 14 (1953).
289. E.g., Massachusetts Bay Transp. Authority v. Boston Safe Deposit & Trust Co.,
348 Mass. 538, 205 N.E.2d 346 (1965); Behnke v. New Jersey Hwy. Authority, 13 N.J.
14, 97 A.2d 647 (1953).
290. Highway Displays, Inc. v. People, 39 Misc. 2d 703, 241 N.Y.S.2d 887 (Sup. Ct.
1963).
291. Town of Amherst v. Niagara Frontier Port Authority, 38 Misc. 2d 906, 238
N.Y.S.2d 710 (Sup. Ct. 1963). While the Port of New York Authority consents to actions
at law or equity, its governing statutes expressly exclude injunctive actions against the
Authority or its officers or employees other than those brought by the Attorneys Gen-
eral of New York or New Jersey. N.J. STAT. ANN. 32:1-161, 1-165 (1963); N.Y. UNCON-
SOL. LAU s 7105, 7109 (McKiiney 19t61). See also Lewis v. Letkowitz, :i2 Misc. 2d 434,
223 N.Y.S.2d 221 (Sup. Ct. 1961) mandamuss not available to compel Attorney General
to seek injunction).









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1417


ministrative procedure acts are usually applicable only to state
agencies,2"2 presumably excluding the myriad of county and city
created authorities.2"3 Second, even state created authorities may be
excluded, for state administrative procedure acts usually define agen-
cies as bodies empowered to make rules or to adjudicate cases,204 and
a court may view an authority as more analogous to a proprietary
private corporation than to a rule-making or adjudicative entity for
this purpose. Indeed, given the independence of authorities from the
state295 and their revenue-producing purpose, as well as the possible
cost and delay attendant to court review, it is highly doubtful that
state legislatures intend to waive immunity as to authorities through
administrative procedure acts.
And yet, particularly in the case of the larCrer and more powerful
authorities, such as the multicounty authorities, many decisions,
from rate fixing to route planning, do seem to constitute "rules" of
general application-29 that seriously affect the rights, duties, and
benelts of citizens. For these authorities, at least, it would not be
unreasonable to provide a method of review easier than the cum-
bersome extraordinary writs, so that a person aggrieved by authority

292. See 1 F. COOPER, supra note 287, at 98-107, for a discussion of the various ways
in which states define "administrative agency."
293. An authority created by a county or municipality under an enabling statute
would be at most identified as an "alter ego" of its creator, and municipalities are not
ordinarily within the contemplation of "agency" in administrative procedures acts. See,
e.g., Sloven v. Olson, 98 N.W.2d 115 (N.D. 1959) (city held not to be an agency
under act that defined agencies as having statewide jurisdiction). But see Housing Au-
thority v. City of Los Angeles, 38 Cal. 2d 853, 243 P.2d 515 (1952) (city and city-created
authority acting under the state housing authorities law is an agency of the state).
294. See generally 1 F. CooPER, supra note 287, at 99-107. See id. at 109-27 for deci-
sions and statutes defining "rules" and "adjudicatory proceedings." See also Los Angeles
Metropolitan Transit Authority v. Brotherhood of R.R. Trainmen, 54 Cal. 2d 684, 687
n.1, 355 P.2d 905, 906 n.1 (1960) (court noted that the Authority's creating act declared
it to be a public corporation rather than a state agency).
295. The question of whether or not an authority is a "citizen" for purposes of
diversity jurisdiction in federal courts appears to turn on how closely the authority is
identified with its creating state. The view that the authority is the "alter ego" of the
state, rather than a separate citizen, is on the wane, and, consequently, authorities are
increasingly less likely to be immunized by the eleventh amendment from federal di-
versity suits brought by private parties. See S.J. Groves & Sons Co. v. New Jersey Turn-
pike Authority, 268 F. Supp. 568 (D.N.J. 1967). Sec also Guaranty Trust Co. v. West
Virginia Turnpike Commn., 109 F. Supp. 286 (S.D. W. Va. 1952). But see Weyerhacuser
Co. v. Roads Commn., 187 F. Supp. 766 (D. Md. 1960).
296. Actions taken by a governmental agency that are not in the nature of an in-
dividualized trial-like adjudication are commonly called "rules." See 1 K. DAVIs, AD-
MINISTRATIVE LAW TREATISE 5.01 (1958). The rules issued by an agency are commonly
grouped into "interpretative" rules, e.g., definitions of words in the statute creating the
agency, and "legislative" rules, e.g., regulations issued under the express authority of the
statute. Courts are likely to give more deference to the agency's adoption of legislative
rules and will only examine such actions to see if they are authorized and constitutional.
Inr the case of interpretative tules, the courts often substitute their interpretation of a
statute for that of the agency. Id. at 5.03-.04.


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Michigan Law Review


action could get a determination on whether the authority was
acting ultra vires or in violation of required procedures.297

V. CLAIMED ADVANTAGES OF AUTHORITIES
From the birth of the Port of New York through the postwar
boom in authorities, this form of government has had both severe
critics2 s and vigorous defenders.290 However, the more recent appear-
ance of larger, multicounty authorities has not yet generated a great
deal of debate. The arguments advanced for and against traditional
authorities may not always be equally relevant to the newer de-
velopments. For example, the multicounty authority may be less
vulnerable to such charges as that it serves no function other than
facilitating the issuance of bonds, which a city could issue on its
own,300 perhaps at a lower cost.301 On the other hand, the multicounty
authority, by virtue of its size and importance, may exacerbate cer-
tain problems, such as lack of local control, which are said to afflict
the ordinary authority.
Whether authorities are created because other governmental
bodies are unable to solve a particular problem, because other bodies
are anxious to avoid the problem, or for another reason,302 their use
is usually justified on three grounds: (I) they have financial advan-
taes, in that they are separate bodies for purposes of state debt limi-
tations; (2) they are more efficient because, among other reasons,
they attract superior personnel, "de-politicize" an undertaking an
must be run in a businesslike manner in order to keen their hanr
rats; and (3) they have a jurisdictional flexibility, so their n-
daries may be made coterminous with the range nf a np chPair-e.

A. Financial Advantages
As has been pointed out above,303 one of the major reasons for the
rapidly spreading use of authorities has been the desire to escape
297. In at least one case, Guaranty Trust Co. v. West Virginia Turnpike Commn., 109
F. Supp. 286 (SJ). W. Va. 1952), a federal district court showed some willingness to re-
view a particular decision made by a public authority in a declaratory judgment action.
298. See, e.g., McLean, Use and Abuse of Authorities, 42 NATL. MUN. REV. 438 (1953);
Morris, supra note 65; Porter, A Plague of Special Districts, 22 NATL. MUN. REV. 544
(1933); Quirk & Wein, supra note 3.
299. See, e.g., Edelstein, supra note 9; Gerwig, supra note 9; Nchemkis, supra note 9.
300. Cities are, in most states, authorized to issue revenue bonds. See note 179 supra.
301. If the city has not reached the limit imposed upon its debt, it may issue general
obligation bonds, which may have lower interest rates than revenue bonds. Cf. note 314
infra and accompanying text.
302. Compare Dearing, supra note 34, at 741, and Note, Special Districts and Defi-
cient Local Government in the Salt Lake Metropolitan Area, 7 UTAH L REV. 209 (1960),
with McLean, supra note 298, at 443, and Makielski, supra note 65, at 1199.
303. See text accompanying notes 65-73 supra.


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state-imposed debt restrictions.04 However, the impact of debt limita-
tions is decreasing because increases in property values and assess-
ments have given local governments more debt to work with.30"
Moreover, where the "special fund" doctrine is accepted, traditional
authorities have no financial advantages, since municipalities can
finance special projects through their own revenue bonds without
adding to the debt figure.a30 Nevertheless, avoidance of debt limita-
tions seems to have been a factor in the formation of authorities, for
there is a positive correlation between restrictive debt provisions and
the number of special governments.307
The criticism that the use of authorities subverts the public policy
embodied in the debt limitations is not persuasive. Debt limitations,
for the most part, originated in financial abuses of the distant past.308
Neither private debt nor governmental debt (as symbolized by federal
deficit spending) attracts the public suspicion and disapproval that
it once did, and authority defaults have never been a major prob-
lem.309 Moreover, because present-day governments engage exten-
sively in activities once thought appropriate only for proprietary en-
terprises, the modern demand for capital projects could not have been
foreseen at the time most debt limitations were enacted. Over the
years, as state legislatures, the courts, and often the electorate have
sanctioned the authority device, authority debt has grown enor-
mously.310 Clearly, the public policy in favor of providing services has
proved more compelling than that of limiting state and local debt.
Most commentators conclude that debt limitations are ineffective
and unnecessary, and ought to be revised or abolished.311 It could be
argued that the constraints on local financing should be attacked
directly by changing or eliminating debt limitations, rather than cir-
cumvented by the creation of authorities. However, new projects are

304. See note 65 supra and accompanying text. See also Gerwig, supra note 9, at 596-
98, 612-13; COUNCIL REPORT, supra note 9, at 21-28, 103.
305. U.S. ADVISORY COMMON. ON INTERGOVERNMENTAL RELATIONS, supra note 12, at 54.
306. See text accompanying notes 176-79 supra.
307. States with constitutional debt limitations have an average of 336 special govern-
ments per state, while those states without such limitations average 245 special govern-
ments. Moreover, in states that limit municipal debt, on the average. 38.63 per cent
of the total municipal debt is unsecured, while in nonlimit states only 26.32 per cent of
the debt is unsecured. L. GOODALL, supra note 65, at 44-45, 54-55. See also U.S. ADVISORY
COMMON. ON INTERGOVERNMENTAL RELATIONS, supra note 12, at 32.
308. See text accompanying notes 66-68 supra.
309. As of 1967, there had been only thirty known defaults since World War II by
the thousands of special governments that periodically issue bonds. Of the thirty de-
faulted issues, nineteen were of nonguaranteed bonds. W. MIITCIILL, TIE EFFECTIVE-
NESS OF DEBT LIMITS ON STATE AND LOCAL GOVERNMENT BORROWING 29-30 (1967).
310. See Gerwig, supra note 9, at 598.
311. See, e.g., L. GOODALL, supra note 65, at 33-34; W. MITCHELL, supra note 309, at
16-17; U.S. ADVISORY COMMON. ON INTFRG(OVFRNME.NTAL RELATIONS, supra note 70, at 6;
Bowman, The Anachronism Called Debt Limitation, 52 IowA L. REV. 863 (1967).


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1420 Michigan Law Review [Vol. 71:1376

constantly in demand, and it may be time-consuming and politically
difficult to obtain a constitutional or statutory amendment, especially
one that would on its face increase the ability of governments to con-
tract debt.312
However, the method of financing used by traditional authorities
cannot be embraced without reservation. First, it injects a considera-
tion for the wishes of absentee bondholders into the management of
a project supposedly operating in the public interest.313 Second, it
could be argued that revenue bond financing lacks flexibility in that
it must guarantee that a specific project will continue to exist and
collect revenues for, say, thirty years. Most importantly, a higher in-
terest cost appears to be attached to revenue bonds than to general
obligation bonds, presumably because of the greater risk perceived
by investors.314
Multicounty authorities seem able to maximize the advantages
and to minimize the potential drawbacks of traditional authority fi-
nancing. Like other authorities, they provide a means to avoid debt
limitations on the cities, counties, or state involved, although they
may be subject to debt limitations of their own. When an authority
embraces several cities or counties, it seems logical that if the new
entity has any debt limitation of its own, it would be equal to the
combined limits of the counties under its jurisdiction unless the
enabling statute declares otherwise.315
312. Morris, supra note 65, at 265-68, suggests that courts might have declared build-
ing authorities unconstitutional in order to force legislatures to re-examine debt limita-
tions, but he notes that the Maine and Georgia experience when such a stand was
taken indicates that judicial firmness might be futile.
313. See PUBLIC AUTHORIIES, supra note 3, at 23-28.
314. The Council of State Governments tentatively concluded that the cost of
borrowing by authorities is greater than the cost of borrowing by a parent state and
greater than the average cost of borrowing found in the Bond Buyer's Index. COUNCIL
REPORT, supra note 9, at 70-74. See W. MITCHELL, supra note 309, at 28-31, citing studies
that estimate that the interest rate differential ranges from .25 per cent to a full 1.25 per
cent for longer maturities. This difference is significant; a .5 per cent difference in the
interest rate (e.g., from 3.0 to 3.5 per cent) will raise the aggregate interest cost by 19
per cent on a thirty-year serial bond. See also J. MAXW.LL, FINANCING STATE AND LOCAL
GOVERNMENTS 204 (1965). A defender of the authority device can, of course, reply that
the alternative of general obligation bonds is not available because of debt limitations,
and that the nonfinancial advantages of authorities more than compensate for the extra
interest cost. Cities in most states can issue their own revenue bonds without using the
authority device and still avoid debt limitations by invoking the "special fund" doc-
trine. See text accompanying notes 176-79 supra. However, these city revenue bonds
would probably appear to investors to be just as risky in relation to general obligation
bonds as are authority bonds. Thus, the interest rate differential would still exist, unless
it should appear highly probable that the city would be willing and able to step in
should the lack of project revenue threaten to cause default. Nevertheless, interest costs,
and consequently the rates charged for use of the facilities so financed, may be higher
than they would be if debt limitations were removed, allowing general obligations to
predominate.
315. Since debt limitations are usually expressed in terms of a percentage of assessed
value, see text accompanying note 71 supra, the debt limitation of a multicounty author-
ity could be based on the total of the assessed values of the separate counties.


~ Il__~*T~-p~---m------~-. ~--'---------cs*~)








Comments


The financing method of most multicounty authorities-byvai-
ous combinations of revenue bonds, local property taxes. and state
funds-gives them another advantage in that they can undertake roij-
ects of great magnitude that could not be financed any other way
(outside of federal involvement).316
Nor do multicounty authorities raise the problems connected with
the financing of authorities to such a great degree. A state or munici-
pal stake in the financing of an authority dilutes bondholder influ-
ence in its operation and minimizes any chance of bondholder con-
trol following default. Also, although the continued reliance, at least
in part, on revenue-bond financing does irrevocably commit the gen-
eral government to the project, undertakings by multicounty authori-
ties commonly involve facilities that are intended for long-term use,
so the loss of flexibility is not damaging. Finally, the charge that rev-
enue bonds result in higher interest costs may not be appropriate
when applied to the typical multicounty authority. The massive
commitment of state and local resources to such projects as metro-
politan transportation systems suggests that they will not be allowed
to fail, and an investor might well believe that the revenue bonds
offered to finance them are not significantly more risky than general
obligation bonds.

B. Efficiency
Another reason for the use of the authority device is the desire
to promote efficiency in providing services. The origin of the belief
that authorities can more etticiently manage new revenue-producing
projects lies in the history of government activities. Many such proj-
ects, such as mass transportation, port facilities, and even toll bridges,
tunnels, and ferries, were once thought too proprietary to be under-
taken by a government. As local governments moved into these areas
they adopted the corporate form, which they felt to be more appro-
priate to such business-like activities."17 Local governments wanted
their service enterprises to be efficiently run and "profit-making"
(i.e., able to pay off the borrowed funds plus interest over and above
the costs of operation, maintenance, and, sometimes, expansion), yet
they had no desire or capability to supervise the operational details
closely.318
It has been suggested that a meaningful comparison of the effi-
ciency of authorities with that of general governments is impossible
because such a comparison pits different kinds of bodies with differ-
ent purposes and methodologies against each other.319 It may indeed
316. See Gerwig, supra note 9, at 613, 615.
317. See COUNCIL REPORT, supra note 9, at 21-23.
318. Id. at 22.
319. PUBLIC ATORITrrIES, supra note 3, at 91-92.


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June 1973]









1422 Michigan Law Review [Vol. 71:1376

be impossible to compare the efficiency of these bodies generally.
However, arguments about their relative efficiency in handling a
particular project can be adduced from the very differences in their
purposes and organization t the typical authority, unlike a gen-
eral government, usually has only one responsibility, so authority
directors can concentrate on the one project and develop an exper-
tise, which may be important if a complicated service such as mass
transit is involved. Also, those in charge of a single-purpose enterprise
need not worry about making the delicate balance among competing
needs and constituencies that is required of general governments.
cod authorities may be free of certain constitutional or state law
requirements that restrict general governments,320 such as civil ser-
vice laws321 and laws governing state agencies in such respects as wage
r tS22 contract specifications,323 and the acceptance of low bids.324
Thirdand more generally, authorities seem to have greater flexibil-
ity in their methods of operation. For example, when they negotiate
leases, guarantees, and loans with private businesses they run less risk
than a general government of being charged with acting beyond their
proper sphere or of diverting public funds to private purposes.825
It also seems likely that policy decisions are more quickly made and
more easily altered in authorities than in local governments. The
board of directors is not subject to the procedures, political maneu-
vering, and bureaucratic delays that may act as a drag upon general
government decision-making. The advantages that come with corpo-
rate form would seem to carry over fully into multicounty authorities.
It is sometimes suggested that authorities are particularly efficient
because they must be run in a "business-like" manner in order to
maintain their bond ratings and attract investors.826 Perhaps the
shadowy presence of bondholders does promote efficiency in author-
ity operation. Because an authority usually has the responsibility for

320. It is interesting to note that cases so holding, see text accompanying notes 321-
24 infra, excuse authorities from the operation of certain state laws on the ground that
authorities are too independent to be agencies or branches of the state. But see Port
of New York Authority v. J.E. Linde Paper Co., 205 Misc. 110, 127 N.Y.S.2d 155 (N.Y.
City Mun. Ct. 1953), excusing the Authority from emergency rent control laws on the
ground that as an arm of the state it was exempt from general legislation unless specif-
ically included.
321. See, e.g., New Jersey Sports & Exposition Authority v. McCrane, 119 N.J. Super.
457, 292 A.2d 580 (1971).
322. Agesen v. Catherwood, 32 App. Div. 2d 416, 303 N.Y.S.2d 987 (1969).
323. Plumbing, Heating, Piping & Air Conditioning Contractors Assn. v. New York
State Thruway Authority, 5 N.Y.2d 420, 158 N.E.2d 238, 185 N.Y.S.2d 534 (1959).
324. Thompson Constr. Corp. v. Dormitory Authority, 48 Misc. 2d 296, 264 N.Y..2d
842 (Sup. Ct. 1965).
325. See PUBLIC AUTORITIES, supra note 3, at 92-93, 195-96.
326. See COUNCIL REPORT, supra note 9, at 51; PUBLIC AUTHORITIES, Supra note 3,
at 90-92, 195-96. Note that this view is a counterweight to the argument that the infu-
ence of absentee bondholders is an undesirable feature of authorities.


__C _____II~_Y_____I~_ __I_~_~_ ~_








Comments


only one service, its financial situation is far more exposed than it
would be if the service were merely one of many items on a general
government's annual budget. And the major investors in state and
municipal bonds are financial institutions27 capable of detailed and
sophisticated analysis. Thus, authority directors may well work out
costs, rates, and future plans with an eye cast toward the bondholders.
Whatever effect a concern for bond ratings has on efficiency, it is prob-
ably enhanced in the multicounty authority because the very size of
its projects encourages careful scrutiny by investors.
The fact that the presence of bondholders may encourage effi-
ciency does not necessarily lead to the conclusion that authorities are
more efficient than general governments. Whatever the influence
of bondholders-and it is probably easy to overvalue-authorities
are not subject to the direct outside control that shareholders poten-
tially exercise over corporations and the electorate exercises over
cities. All local governments have credit ratings and public con-
fidence to worry about, and it is hard to see why they should be any
less motivated than authorities to conduct their affairs efficiently.
The influence of bondholders is merely another incentive to act effi-
ciently and is not as telling as the organizational and operational
differences between authorities and general governments.
It may also be suggested that authorities are more efficient than
general governments because they permit capital facilities to be
constructed and managed in the public interest by an organization
that maintains the low profile of a private business-in short, an au-
thority can depoliticize the provision of a service. It is difficult to
evaluate this contention because the virtues of being "out of politics"
are conjectural and not susceptible of easy proof. Perhaps an unex-
pressed assumption that accompanies this view is that the decisions
made in operating authority facilities are basically economic, "busi-
ness" decisions. It would follow that, while it is in the public interest
to have the facilities available, once they do exist it is not the public
interest but ordinary business considerations that should guide their
operation. This assumption may merely reflect a popular view that
private businesses are better managed than government bodies. Thus,
depoliticizedd" would simply mean that a "business-like" decision-
making process is used instead of a governmental one, which is just
another way of stating the organizational advantages discussed above.
Another meaning that "out of politics" may carry is that authori-
ties are relatively immune from partisan considerations. In this sense
authorities are depoliticized in that neither their personnel nor their

327. In 1967, banks, insurance companies, other corporations, and miscellaneous in-
vestors held 68.3 billion dollars (par value) of state and municipal bonds, as compared
to the 39.8 billion dollars held by individuals, partnerships, and personal trading ac-
counts. MOODY'S INVESTOR SERVICE, INC., MUNICIPAL AND GOVERNMENT MANUAL a16 (1968).


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Michigan Law Review


policies are usually subject to voter approval. This suggests an
analogy to the insulation afforded appointed judges so that the objec-
tivity of their decision-making will not be undermined by the p r~r
pect of upcoming elections. Perhaps directors of authorities can simi-
larly make decisions without having to play to the sympathies of
various blocs of voters or to worry that their political opponents will
be presented with a campaign issue. Moreover, the fact that there
are no periodically elected directors, who may feel obligated to
make changes because they openly criticized their predecessors,
promotes continuity in long-range planning.
Finally, if authorities are sufficiently depoliticized. they may at-
tract more competent personnel than do other governmental institu-
tions.328 Studies of public authority boards show a high preponder-
anceof business and professional people serving as directors.329 The
multicounty authority can be expected to do an even better job in
attracting superior personnel, for the job to be done is both chal-
lenging and vital to the community, and, while a director's position
will not require the unpleasantness of an election, it may command
a considerable amount of prestige and power.330 In some instances a
substantial salary is also offered.331 It might be feared that authorities
will drain competent manpower from other local governments, but
it should be kept in mind that authorities probably attract many
people who would not otherwise enter politics.332
It may be true that depoliticization promotes efficient operations,
but it is not clear that all authorities are truly depoliticized. The
size and function of the authority is again relevant: An industrial
exhibit, planetarium, or parking authority may indeed be out of the
political limelight; the Port of New York Authority clearly is not.
Such multicounty authorities are frequently subject to the vicissi-
tudes of politics.83 In the first place, the creating statute may pre-
328. PUBLIC AurrHORmES, supra note 3, at 13, 57-64.
329. See text accompanying note 31 supra.
330. PUBLIC AUTHORMTES, supra note 3, at 66-68. For example, Robert Moses has been
one of the most important and controversial figures in public service in New York for
many years. Much of his reputation was generated by his chairmanship of such authori-
ties as the New York State Power Authority, the Triborough Bridge and Tunnel Author-
ity, and the Jones Beach State Parkway Authority. See J. DOIG, supra note 111, at 37-41;
PUBLIC AUrrTRITIES, supra, at 145-46. Austin Tobin, long-time director of the Port of
New York Authority, achieved a similar reputation. See J. DorI, supra, at 33-35; UaAN
AREAS, supra note 3, at 330-33.
331. PUBLIC AUTORrrIE, supra note 3, at 67-68. For example, in 1964, Tobin's salary
as Director of the Port of New York Authority was 60,000 dollars, higher than that of
the Mayor of New York City or the Governor of New York. The head of the New Jersey
Turnpike Authority received 29,500 dollars. Id. at 107.
332. PUBLIC AUTHoRiTIEs, supra note 3, at 64-68.
333. See PUBLIC AuTHORITIES, supra note 3, at 140-44. The choice among the plans
submitted for the New York MTA, discussed in the text accompanying notes 111-15
supra, was not entirely free from partisan concerns. On the political background against
which the MTA was created, see J. Dole, supra note 111. See also S. MERUMN, JURISPRU-


[Vol. 71:1376


1424









Comments


scribe various political checks and balances on authority action, such
as New York City's veto powers over certain transit operations of the
MTAS34 and the powers of the advisory board of the MBTA over fare
changes and other important decisions.53 In the second place, it is
impossible to keep multicounty authorities out of the public eye
given the impact that their decisions as to fares and routes have on
metropolitan life.336 Nor can they stay entirely clear of interest
groups, such as labor unions, merchants' associations, and, in recent
years, environmental organizations. Increasingly, the question be-
comes not whether authorities are involved in politics, but rather
how do they, and how should they, fit into the political decision-
making process.337
There is another sense in which it might be said that authorities
increase efficiency. It could be argued that the use of revenue-depen-
dent authorities results in a better allocation of resources than does
providing the same services through taxation, for those who benefit
directly from the facilities, rather than the general body of taxpayers,
pay or them. The economics of user charges338 are beyond the scope
f this article, but. according to traditional economic models if an
authority's unsubsidized rates reflect the full cost of a given project,
a use pattern will tend to develop that accurately reflects the demand
for and relative value of. the .ervie. Projects supported by tax funds,
on the other hand, shift the cost to the entire public; artificially low
rates, or no rates at all, may be charged, resulting in a greater demand
than the relative value of the service would ordinarily dictate. This
is theoretically an inefficient allocation of resources, although it may
be justified by public policy considerations.339
Even disregarding the serious objection that many authority func-
tions are vital enough to warrant tax financing in order to insure a
certain minimum level of services,340 this argument is not completely
DENCE AND STATECRAFr 3-31 (1963), on the part played by politics in the creation of the
Wisconsin Development Authority.
334. See text accompanying note 110 supra.
335. See text accompanying notes 130-32 supra.
336. Of course, the statutory checks on authorities often operate in just those situa-
tions most likely to arouse public concern.
337. See generally text accompanying notes 398-401 infra.
338. See generally NATIONAL INDUSTRIAL CONFERENCE BOARD, USE OF SERVICE CHARGES
IN LOCAL GOVERNMENT (1965); TAX FOUNDATION, GOVERNMENT FINANCES BRIEF No. 20,
SPECIAL ASSESSMENT AND SERVICE CHARGES IN MUNICIPAL FINANCE (1970).
339. Insofar as this argument is concerned, if a local government issues its own rev.
enue bonds rather than financing a project through taxation, it would be as efficient as
an authority in regard to allocation of resources.
310. It has been pointed out in connection with authorities that the choice between
financing on a benelit-received principle or financing through taxes because of a de-
sired minimum level of services for the entire community is a basic question of public
policy that should be decided by traditional political methods. Sliestack, supra note 19.
at 568-69.


June 1973]


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Michigan Law Review


convincing, for the charges levied by authorities may not always re-
flect the actual costs of particular facilities. For example, an authority
may pool its revenues and equate total revenues and total costs, so
that profitable facilities help finance deficit ones.341 Also, reflection
of the full cost is undercut by tax exemptions,3a government grants,
and the use of government facilities. Finally, the monopoly power
possessed by some authorities may negate a meaningful expression of
demand.343 The resource allocation argument is weakest in the case of
multicounty authorities because they are most likely to pool rev-
enues, receive substantial government grants, facilities, and tax
revenues, and have a monopoly.
Multicounty authorities, however, benefit from another important
source of efficiency that may not be shared by other local govern-
ments. Because they are responsible for a single function on an area-
wide basis, multicounty authorities can achieve economies of scale.
For instance, they may be able to obtain financing at lower costs and
to purchase materials in large quantities for lower prices.344 Also,
the use of the latest technology-for example, the use of computers
to monitor transportation-is more likely to be economically war-
ranted on a multicounty basis than in an individual county or town.
Multicounty authorities can also avoid duplication of facilities
and personnel. A single board of directors can be substituted for the
multitude of boards required if each city or county is to provide the
service on its own. Water supply or sewer authorities can integrate
pipeline systems and efficiently link them with reservoir and treat-
ment facilities. Transportation authorities can design rail and bus
lines to complement each other and can eliminate underutilized sta-
tions, depots, and tracks in order to locate new ones where service is
most needed.845 The economies of scale and the avoidance of dupli-
cation of facilities and personnel, together with the advantages of
corporate organization, singleness of function, and depoliticized
operation, do indicate on balance that authorities, and particularly
341. COUNCIL REPORT, supra note 9, at 105-06.
342. See text accompanying notes 50-62 supra.
343. Authorities may be granted monopolies by statute for certain kinds of services,
such as specific modes of transportation, or they may have natural monopolies in the
case of projects such as dams, bridges, tunnels, and some public buildings. Even for
operations, such as dormitories or parking facilities, that could be subject to competi-
tion, authorities have some advantages, as, for instance, tax exemption.
344. One source reports, for example, that per-capita investment for a sewerage plant
to serve 500,000 people is only 75 per cent that of a facility for 50,000, and that it costs
fifty-eight dollars per million gallons to treat sewage with a 1 million-gallon capacity
plant, but only twenty-three dollars with a 10 million-gallon plant and eight dollars
with a 100 million-gallon plant. METROPOLITAN AMIRICA, supra note 2, at 43.
345. One of the main reasons that the Port of New York Authority was created was
to unify and consolidate competing enterprises, particularly the railroads, which each
desired terminal facilities in strategic harbor areas. See E. BARD, supra note 74, at 37-39;
F. BIRU, supra note 74, at 10-13.


1________^~~1_ Y__


[Vol. 71:1376


1426









Comments


multicounty authorities, can furnish services more efficiently than a
general government can.

C. Jurisdictional Advantages
A persuasive argument in favor of authorities arises from their
jurisdictional adaptability.34" An authority can be created to plan
and administer a single bridge, tunnel, or dam that is already wholly
contained within a city or county. Or, if a turnpike is needed across
the one hundred miles from one city to another, an authority can be
responsible for that thin strip spanning several counties.
This jurisdictional flexibility has its greatest impact in metro-
politan areas, which are typically composed of a large central city
surrounded by a group of smaller, governmentally independent
suburbs spread across several counties. Some degree of interde-
pendence among these communities is inevitable: They share
natural resources, such as water supplies and recreation areas, and
they share man-made facilities, such as highways, airports, and utility
systems.347 There is a constant interchange of people who work, shop,
and seek entertainment outside their own communities. Therefore,
the policies of a city often have serious consequences-known as
"spillover effects"348-for its neighbors. The failure to control air
pollution in central city factories, for example, affects the air of the
surrounding suburbs; the failure to treat sewage adequately in up-
river communities burdens the downriver central city.
Paradoxically, one of the most persistent problems with special
governments has been a product of their marked success: Their use
has resulted in a bewildering maze of too many governments.849
Within the 227 Standard Metropolitan Statistical Areas (SMSAs),
There are 8,636 counties, municipalities, and townships and another
7,049 authorities and special districts, or about sixty-nine local gov-
ernments per SMSA.350 Rather than creating new jurisdictions coter-
minus with particular needs or uniting municipalities and counties
in joint projects, the creators of special governments have tended to

346. This same argument, of course, is advanced for special districts, with the differ-
ence that in that case a taxing unit is created coterminous with the service to be pro-
vided. Thus, a soil conservation district can include the whole of a natural watershed
lying in several counties, and only residents within the district are taxed.
347. See METROPOLITAN AMERICA, supra note 2, at 5-7.
348. See, e.g., Lineberry, Reforming Metropolitan Governance: Requiem or Reality,
58 GEo. L.J. 675, 677 (1970): METROPOLITAN AMURICA, supra note 2, at 6.
349. See, eg., PUBLIC AUTHORITIES, supra note 3, at 167-75; R. WooD, 1400 GOVERN-
MENTS (1961); McLean, supra note 298, at 438, 441; Nehcmkis, supra note 9, at 30-31;
Porter, supra note 298.
350. In 1967, 29 SMSAs counted 200 or more local governments within their bound-
aries, and the Chicago area contained 1,113. GOVERNMENTAL ORGANIZATION, supra note
10, at 12.


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[Vol. 71:1376


Michigan Law Review


give them the same boundaries as existing cities or counties.851 Fur-
thermore, the majority of special governments appear to have been
created on an ad hoc basis with little attention paid to consolidation
with. or elimination of, existing special governments.,32
The consequent fractionalization of government has two detri-
mental effects. First, when activities are committed to the control of
small, single-purpose bodies and are not coordinated into an over-all
plan, problems of cooperation, competition, definition of respective
powers, or merely the establishment of relationships among the local
governments are inevitable. Second, citizen involvement in local gov-
ernment is discouraged. Not only are citizens likely to be confused
about the jurisdiction and powers of special governments and unable
to keep informed about their operation,353 but also there may seem
to be no one person or body to hold accountable for the over-all drift
of local development.
This proliferation may be to some degree unnecessary. In the
first place, it might be better if some projects given to special govern-
ments-such as industrial exhibits, planetariums, mineral springs,
commercial office buildings, and luxury housing-were left in private
hands. In the second place, it is far from clear that social govern-
ens are always the best way of managing even those activities suited
for governmental control. Cemeteries, libraries, and parks take no
special technical expertise to manage and may appropriately be left
to general governments.354 Corporate decision-making and insulation
from politics are unlikely to be important in the routine management
of such activities as war memorials and parking lots.*55

351. See PUBLIC AUTHORITIES, supra note 3, at 151. See also Porter, supra note 298,
at 546.
352. It is usually necessary to wade through an immense variety of statute headings
to find the scattered laws on particular authorities. Gerwig, supra note 9, at 592. See also
New York Post Co. v. Moses, 10 N.Y.2d 199, 207, 176 N.E.2d 709, 713, 219 N.Y.S.2d 7,
12 (1961) (Desmond, C.J., dissenting): "The legislation applicable to the various Authori-
ties is mostly ad hoc, a 'wilderness of special instances,' so policy considerations to some
extent control us in deciding whether particular statutes which do not mention Author-
ities do or do not apply to them."
353. Despite the fact that the large, important authorities are headed by appointed
officials, many special governments do have at least some elected officials. In 1967, 8,609
special governments did not have any elected officials, while 12,655 had an average of 4.3
elected members each. US. BUREAU OF THE CENSUS, DEPT. OF COMMERCE, 1967 CENSUS
OF GOVERNMENTS VOL. 6, No. 1: POPULARLY ELECTED OFFICIALS OF STATE AND LOCAL GOV-
ERNMENTS 11 (Table 5), 30 (Table 12).
354. Once the capital facilities are built-and general governments routinely contract
for such projects on an individual basis-the mere collection of revenues and the dis-
charge of revenue bonds, which keep some single-facility authorities in business, can be
done by general governments.
355. It has already been noted that, because of the "special fund" doctrine, constitu-
tional debt limitations are no bar to general governments that wish to issue their own
revenue bonds and keep the facilities under their own control. See text accompanying
notes 176-79 supra. However, in the larger cities, where new construction and planning
of these facilities are constantly going on, a separate governing body may be justified.


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1428








Comments


Before creating an authority, the legislature should consider
whether it is legitimately needed for increased ecien or urisdc-
tional flexibility, as well as for its financial advantages.

VI. MULTICOUNTY AUTHORITIES AND ALTERNATIVE
AREAWIDE GOVERNMENTS
The use of the authority device is but one of many plans that have
been offered to improve various aspects of metropolitan govern-
ment;356 like the others, it has unique strengths and weaknesses. As
suggested above, the strengths of multicounty authorities lie in in-
creased efficiency and flexibilitv nf irisditin. Among the services
that are best suited for administration by this kin of body are those
that require accumulated eXertise anl terhnnlogical sonhitiration
in their management. Continuity of management, attraction of su-
perior personnel, and corporate powers and decision-making will be
most beneficial in such areas as transportation, water supply and sew-
erage, port direction, and pollution control. Services in which area-
wide administration and planning would result in significant econ-
omies of scale and integration of separate facilities are also likely to
benefit from administration by multicounty authorities.357 An area-
wide policy is mandatory, for instance, if a transportation plan is ef-
fectively to coordinate bus, train, and subway services with auto travel
on the roads, ferries, and bridges, and through tunnels.
Yet, while the use of a multicounty authority aids rational plan-
ning in the distribution of a single service, it might be argued that
general governments are better suited to areawide administration.
Not only can they, too, achieve economies of scale, but they alone have
an overview of all the service needs of an area and are directly re-
sponsible to the voters. However, the current proliferation of govern-
ments within metropolitan areas has made areawide administration
by general governments almost impossible. The planners in each city
and county are not only limited to their own jurisdictions, but also
run into a variety of autonomous single-purpose governments within
their own boundaries.
Because of these problems, many suggestions have been made for

356. See text accompanying notes 358-67 infra.
357. Needs that are merely common to all parts of a metropolitan area must be dis-
tinguished from those that are more effectively administered on an areawide basis. It
may well be, for instance, that a dearth of parking lots is a problem throughout a
metropolis; it is far from certain, however, that arcawide administration of parking lots
is necessary to solve the problem. Individual cities may or may not remedy such prob-
lems without risk of serious spillover effects. Sewage disposal and transportation, on the
other hand, may be handled inefficiently if each city cares only for its small domain.
See Banfield & Grodzins, Some Flaws in the Logic of Metropolitan Reorganization, in
MEROPOLIrrAN POLITICS 142-52 (M. Danielson ed. 1966). As is implied by the title of their
article, the authors do not believe that the case for areawide government is as strong as
is often stated.


June 1973]


1429


------ ------- -- ~--rx~nc'









1430


Michigan Law Review


[Vol. 71:1376


coordination or consolidation of traditional general governments in
order to allow areawide planning. Cooperation has been promoted
through intergovernmental agreements358 and the council of govern-
ments approach.31, Such arrangements do have a broad geographical
base and increase awareness of areawide problems. However, because
they are voluntary and lack extensive legal powers, they are limited
in their ability to deal with the difficult and controversial issues of re-
source allocation, the setting of priorities, and the resolution of con-
flicting interests.300 Regional planning authorities or commissions,
which have merely advisory powers,361 have made contributions in
projecting future growth and suggesting appropriate governmental
action, but they too seldom translate advice into action.362 Extensive
efforts have also been made to merge a group of general govern-
ments into a single unit. But such reforms as city-county consolida-
tion,363 annexation,864 federation of local governments,385 and "urban
counties"366 have met with a noticeable lack of enthusiasm among the
electorate.'67

358. See METROPOLITAN AMERICA, supra note 2, at 41-43, 87-88; Kuyper, Inter-
governmental Cooperation: An Analysis of the Lakewood Plan, 58 GEO. L.J. 777 (1970);
Merrill, Our Unrealized Resources-Inter-Municipal Cooperation, 23 OKLA. L. REV.
349 (1970).
359. See METROPOLITAN AMERICA, supra note 2, at 88-90; Comus, The Council of
Governments Approach to Governmental Fragmentation, 22 VAND. L. REv. 811 (1969);
Lineberry, supra note 348, at 680-81.
360. METROPOLITAN AMERICA, supra note 2, at 90.
361. Only about a quarter of these bodies have mandatory referral power to review
local plans, and their implementing powers are severely limited. JOINT CENTER FOR
URBAN STUDIES, THE EFFECTIVENESS OF METROPOLITAN PLANNING 44 (1964).
362. See METROPOLITAN AMERICA, supra note 2, at 110-12; JOINT CENTER FOR URBAN
STUDIES, supra note 361, at 39-66. Recently there have been efforts to give regional
advisory boards mandatory powers over local governments and private parties. See, e.g.,
Assembly Bill No. 220, Cal. Legis., 1972 Regular Sess. (not enacted).
363. See METROPOLITAN AMERICA, supra note 2, at 102-04; Lineberry, supra note
348, at 698-701.
364. See METROPOLITAN AMERICA, supra note 2, at 98-101; Woodroof, Systems and
Standards of Municipal Annexation Review: A Comparative Analysis, 58 GEO. L.J. 743
(1970).
365. See METROPOLITAN AMERICA, supra note 2, at 104-06; Lineberry, supra note
348, at 701-06.
366. See METROPOLITAN AMERICA, supra note 2, at 90-93; Lineberry, supra note 348,
at 683.
367. A summary of 47 referendums on metropolitan reorganization undertaken in 36
of the nation's 227 SMSAs shows that 18 efforts were successful (although one in Denver
created a metropolitan district later declared unconstitutional). This success rate is not
as impressive as it may appear for three reasons. First, the summary includes only those
campaigns in which reform forces were strong enough to get the issue on a ballot; look-
ing at the statistics another way, only ten per cent of metropolitan areas have even
held referendums on reorganization. Second, only four of the 36 areas holding referen-
dums included a city with a 1960 population greater than 500,000. Thus, in the larger
metropolitan areas, where reform efforts are most urgently needed, few major reforms
have been undertaken. Third, it has been the modest changes, rather than the far-reach-
ing ones that have had the greatest success. Lineberry, supra note 348, at 715-17.









Comments


Reasons for political resistance to areawide general government
will vary from case to case, but they may include (1) voter unaware-
ness of the need for change, (2) mutual distrust between residents of
suburbs and central cities, (3) fear that urban reorganization means
higher taxes and loss of neighborhood influence in such matters as
education and law enforcement, (4) opposition from politicians who
face the loss of their jobs, and (5) opposition from black voters who
do not want to dilute their central city political strength.360 Au-
thorities do not face these stumbling blocks, in part because they are
often simply imposed by state legislatures, in part because each au-
thority deals with only one service and leaves general governments
intact, and in part because the kinds of services performed by au-
thorities are usually the less politically volatile ones.
To date, multicounty authorities have permitted areawide plan-
ning for at least some individual services. Whether multicounty au-
thorities will evolve further into areawide general governments is
uncertain. The intriguing model of Metropolitan Seattle suggests an
intermediate step, in which one multicounty authority provides a
number of services areawide, while leaving other governmental func-
tions in the hands of more traditional units.
The Seattle plan was made possible. by a Washington statute
that allows the residents of a city of 500,000 and at least one other
city to form a metropolitan municipal corporation to perform one or
more of six functions: sewage disposal, water supply, public transpor-
tation, garbage disposal, parks and parkways maintenance, and com-
prehensive planning.369 What results is a two-layered government: A
single multipurpose authority carries out its functions areawide, but
all other functions are retained by the local governments. Those ser-
vices handled by the multipurpose second layer are financed by rev-
enue bonds and an areawide property tax.370

368. See METROPOLITAN AMERICA, supra note 2, at 107-10; Lineberry, supra note
348, at 690-96. See also J. BOLLENS & H. SCHMANDT, THE METROPOLIS 491-524 (1965); G.
STEINER, METROPOLITAN GOVERNMENT AND THE REAL WORLD: THE CASE OF CHICAGO 7-12
(1966); Adrian, Suburbia and the Folklore of Metropology, in METROPOLITAN POLITICS
172-79 (M. Danielson ed. 1966); Ylvisaker, Why Mayors Oppose Metropolitan Govern-
ment, in METROPOLITAN POLITICS 180-88 (M. Danielson ed. 1966); Tobin, The Metro-
politan Special District: Intercounty Metropolitan Government of Tomorrow, 14 U.
MIAMI L. REV. 333, 348-53 (1960).
369. WASH. REV. CODE ANN. 35.58.010-.900 (1965), as amended, WASH. REV. CODE
ANN. f 35.58.020-.930 (Supp. 1972). The voters in the Seattle area approved the creation
of Metropolitan Seattle in 1958, but it had powers only over sewage disposal until public
transportation powers were approved by the electorate on Sept. 19, 1972.
370. This development is in accordance with the 1961 recommendations of the United
States Advisory Commission on Intergovernmental Relations that
states consider the enactment of legislation authorizing local units of government
within metropolitan areas to establish, in accordance with statutory requirements,
metropolitan service corporations or authorities for the performance of govern-
mental services necessitating areawide handling, such corporations to have appro-
priate borrowing and taxing power, but with the initial establishment and any


June 1973]


1431












1432 Michigan Law Review [Vol. 71:1376 June

The development of two-layered government is not necessarily in- Star
consistent with the recent movement for decentralization, local con- ma
trol, and community involvement in government.371 The thrust of ult.
this movement has been directed toward such traditionally local ser- pos
vices as law enforcement and education, in which most citizens have sho.
a strong personal stake, and these services can be left with the "first inc:
layer" of local general governments. Services that are more techno- cau-
logical and less controversial can appropriately be given to the second ties
layer.372 cerr
ann-
VII. Accountability ence

The greatest cause for concern about the increasing impact of au- autr
thorities is the lack of public supervision of their activities.73 How- harr
ever, although the policies of most authorities are not subject to elec- scat:
toral approval,874 their activities are subject to some legal checks. gove
Mas-
subsequent broadening of functions and responsibilities being subject to voter ap- men
proval on the basis of an areawide majority.
U.S. ADVISORY COMMON. ON INTERGOVERNMENTAL RELATIONS, GOVERNMENTAL STRUCTURE,
ORGANIZATION AND PLANNING IN METROPOLITAN AREAS 26 (1961). 37
371. See, e.g., Hagman, Regionalized-Decentralism: A Model for Rapprochement in AUrrn.
Los Angeles, 58 GEo. L.J. 901 (1970). note .
372. Some help in deciding which services fall into this group is provided by the 37'
Advisory Commission on Intergovernmental Relations, which has rated fifteen urban 252
services on a scale of "most local" to "least local." U.S. ADVIsoRY COMMN. ON INTER- The r
GOVERNMENTAL RELATIONS, PERFORMANCE OF URBAN FUNCTIONS: LOCAL AND ARtEAwmz and i:
8-23 (1963). The Commission evaluated the services according to seven criteria: (1) the also X
government responsible for a particular service should have sufficient jurisdiction to absent
minimize spillover effects, (2) it should be large enough to realize economies of scale, gener-
(3) it should have geographic area adequate for effective performance, (4) it should have 37
legal and administrative ability to perform the service, (5) it should be responsible for minu:
enough functions so that it is able to balance governmental needs and resources, (6) whom
it should be accessible to its residents so that its functions remain controllable, and LAws
(7) it should be able to maximize citizen participation while performing adequately reserve:
Id. at 41-60. note Z
This list mixes political, economic, and administrative goals that are not necessarily 37S
consistent with one another. No weight is given the various factors, nor is any method public
of striking a balance provided. The list does point out some important considerations, Kinne'
but it should not be considered definitive in a concrete case. See J. BOLLENS & H. 293 N.
SCHMANDT, supra note 368, at 310-13. purpose
Traditionally tax-supported services, such as fire and police protection, public edu- provic
cation, libraries, and public health, are found at the "most local" end of the scale. At ing. S
the "least local" (or "areawide") end of the scale are found pollution control, water 107 (Si
supply, sewage disposal, transportation, planning, and hospital facilities. The Commis. televise
sion seems to have worked more from impression than from hard data, for it recognizes N.Y.S
that its particular ranking would not necessarily apply to any particular metropolitan that it
area. US. ADVISORY COMMON. ON INTERGOVERNMENTAL RELATIONS, supra, at 8. However, its without
"least local" choices do tend to be those that require technologically sophisticated 7
management. INTERG
373. See, e.g., COUNCIL REPORT, supra note 9, at 106-10; PUBLIC AUTHORITIES, supra portion
note 3, at 71-83, 116-22, 125-47; Cameron, Whose Authority?, ATLANTIC MONTHLY, Aug. 380.
1959, at 38; Gerwig, supra note 179, at 403-07; McLean, supra note 298, at 438-39;
Shestack, supra note 9, at 568-69. 381.
374. Most authorities are created without public referendums. See COUNCIL REPORT, 2
supra note 9, at 38-39. In addition, the most important authority offices are filled by 385.
appointment. See text accompanying note 33 supra. problem













TVoL 71:1376


:essarily in-
local con-
Sthrust of
Local ser-
:izens have
: the "first
re techno-
the second


:-act of au-
-s.378 How-
:2ct to elec-
=al checks.

:3 voter ap-
-.L STRUCTURE,

rochement in

Divided by the
ffteen urban
:N. ON INTER-
.ND AREAWIDE
=teria: (1) the
-risdiction to
mies of scale,
: should have
:sponsible for'
resources, (6)
Srollable, and
:- adequately

:2ot necessarily
-s any method
considerations ,
-jOLLENS & H.

:. public edu.
- the scale. At
control, water
The Commis.
- it recognizes
Metropolitan
.. However, its
sophisticated

oRrrInES, supra
O.NTHLY, Aug.
-S, at 438-39;

- NC.IL REPORT,
-s are filled by


JuI


ne 1973]


Comments


1433


--' U-.~"Y'j-;-~Y~L~-- I~-Y~LiLI~XI~--


_j


I____ _


_XUI_


State legislatures have the final power over authorities in that they
may dissolve them once their bonds are discharged. Similarly, as an
ultimate check on mismanagement, there are various statutory, and
possibly common law, remedies for the bondholder constituency
should an authority default.37" Other provisions to deter misconduct
include the powers possessed by governors to remove directors for
cause76 or, more rarely, to veto authority activities.877 Some authori-
ties are empowered or required to hold public hearings before taking
certain actions,78 and a majority of authorities are required to submit
annual reports to executive officials or state legislatures.879 The pres-
ence of state or locally elected officials as ex officio members of an
authority's governing body380 may also keep authority policies in
harmony with those of general governments.s81 There have been
scattered attempts to provide for supervision of authorities by other
government units through such means as the Advisory Board of the
Massachusetts Bay Transportation Authority.882 Such an arrange-
ment is now unique but may well become more common.s

375. Some statutes enumerate bondholder remedies on default. See, e.g., N.Y. PUB.
Aurm. LAw 1207-h, 1273, 1299-m, 1365 (McKinney 1970). See also Nehemkis, supra
note 9, at 24-26.
376. See, e.g., MICH. COMP. LAWS ANN. 124.410 (Supp. 1973); N.Y. PUB. ArrT. LAW
2527 (McKinney 1970) (general removal power applying to all New York authorities).
The removal power is, of course, only a weak deterrent for the most deplorable behavior,
and it has almost never been exercised. Quirk & Wein, supra note 3, at 568 n.284. See
also Watson v. Pennsylvania Turnpike Commn., 386 Pa. 117, 125 A.2d 354 (1956) (in
absence of statutory authorization, governor could not remove authority officer under a
general constitutional removal power over "appointed officers").
377. The Port of New York Authority has been required since 1927 to submit the
minutes of each meeting to the governors of both New Jersey and-New York, either of
whom can veto any action taken. N.J. STAT. ANN. 32:2-6 to -9 (1963); N.Y. UNCONSOL.
LAws 1 7151-54 (McKinney 1961). This power must also be seen only as an ultimate
reservation of power; it had been used only nine times up to 1969. URBAN AREAS, supra
note 3, at 368-72.
378. The New York Metropolitan Transportation Agency is required to hold a
public hearing before changing its fares or fees. N.Y. PUB. Aura. LAW g 1266(3) (Mc-
Kinney 1970). County of Nassau v. Metropolitan Transp. Authority, 57 Misc. 2d 1025,
293 N.YS.2d 1017 (Sup. Ct. 1968), characterized the MTA as a semi-legislative body for
purposes of rate setting and held that the required public hearing was primarily to
provide information for the hearing body and need not be conducted as a judicial hear-
ing. See also Educational Broadcasting Corp. v. Ronan, 68 Misc. 2d 776, 328 N.Y.S.2d
107 (Sup. Ct. 1972), holding that the MTA was within its rights in refusing to permit live
television broadcasts of its public hearings; Glen v. Rockefeller, 61 Misc. 2d 942, 307
N.Y.S.2d 46 (Sup. Ct.), affd. mem., 34 App. Div. 2d 930, 313 N.Y.S.2d 938 (1970), holding

that it was not a denial of due process for the City Transit Authority to raise fares
without a public hearing when it was not statutorily required to hold such a hearing.
379. COUNCIL REPORT, supra note 9, at 57. See also U.S. ADVISORY COMMON. ON
INTERGOVERNMENTAL RELATIONS, supra note 12, at 51-52, on the inadequacy of the re-
porting of authority activities.
380. See text accompanying note 252 supra.
381. See COUNCIL REPORT, supra note 9, at 41-43.
382. See text accompanying notes 130-34 supra.
383. An analogous development may be seen in California's attempt to deal with the
problem of the proliferation of special governments by creating in each county a Local














1434 Michigan Law Review [Vol. 71:1376 June 197

Direct accountability to the public remains a major problem. In Port of.
one sense, this problem arises from the relative anonymity of author- of ConL
cities." 4 An authority may only rarely embark upon major new proj- poenaec
ects, and its routine duties are seldom considered newsworthy by the by a su:
press.""1 MIoreover, the information released about those large au- Congre
thorities that are in the public eye frequently comes from within the thoritv
authority itself.""1 It may be difficult to require an authority to di- its appr
vulge additional information. In New York Post Corp. v. Moses,3s7 the the que
Post sought an order permitting it to inspect the files and records of right to
the Triborough Bridge and Tunnel Authority. The court refused, on the cou
the gTounds that no statutory provision expressly allowed "a tollpayer by Con
or a citizen to examine the papers of an Authority."388 Stressing the actual -
Authority's separate existence from the state, the court also rejected minister
the argument that the Authority was an agent of the city or a "public Author
office" for the purposes of a general public records law.389 Despite to be fu
the desirability of citizen access to information about the conduct of Eve
government departments, the court held that it was up to the legis- the pu.
lature to decide the extent to which an authority's operations should making'
be open to public scrutiny.390 The la-
Tobin v. United States39' involved the Executive Director of the author-
Ho-
Agency Formation Commission (LAFCO), see CAL. Gov-. CODE 54773-99.5 (West 1966),
as amended, CAL. Govr. CODE 54774-54863 (West Supp. 1973), to encourage the or- public
derlv development of local government agencies. These commissions have extensive boom i
powers, including the power to disapprove the creation or modification of special dis- way in
tricts. See generally Note, LAFCO: Is It in Control of Special Districts?, 23 HASTINGS L.J.wy
913 (1972). the avr
384. See U.S. ADVISORY COMMON. ON INTROERGOVERNMENTAL RELATIONS, supra note 12, patten:
at 67-68. See also J. BOLLENS, supra note 8, at 1. supply
385. It has been suggested that this anonymity opens the contracts and directorships Tl
of authorities to political patronage. PUBLIC AUTHORlTIES, supra note 3, at 142; McLean,
supra note 298, at 442. The problem of patronage does not seem to have been exten- the cas
sive in practice, at least in part because salaried directorships and large construction scope I
contracts are normally connected only with the important authorities that receive a fair and/o0
amount of public attention. areawi
386. The Port of New York Authority, an extreme example, has both a public rela-
tions department with an annual budget of over 328,000 dollars and a community rela- layers
tions department. PUBLIC AUTHORITIES, supra note 3, at 12, 131-33. thoriti
387. 10 N.Y.2d 199, 176 N.E.2d 709, 219 N.Y.S.2d 7 (1961). author
388. 10 N.Y.2d at 203, 176 N.E.2d at 710, 219 N.Y.S.2d at 9.
389. 10 N.Y.2d at 203-04, 176 N.E.2d at 710, 219 N.Y.S.2d at 9-10. 392
390. 10 N.Y.2d at 205, 176 N.E.2d at 712, 219 N.Y.S.2d at 11. The court was not 393.
swayed by an argument that this holding would result in a system whereby no repre- 394.
sentative of the public could investigate what happened to the vast sums of money 395.
spent. The statute creating the Authority provided for investigation by the State and Plannin
City Comptrollers, the State Commission of Investigation, the Mayor of New York City, station c
the Chairman of the Senate Finance Committee, and the Chairman of the Assembly points i
Ways and Means Committee. 10 N.Y.2d at 205, 176 N.E.2d at 711, 219 N.Y.S.2d at 10. 1971).
Accord, Brown v. Minuse, 41 Misc. 2d 427, 245 N.Y.S.2d 60 (Sup. Ct. 1963). See also 396.
MICH. COMP. LAWS ANN. 141.421-.433 (Supp. 1973) (provisions for reports, auditing, Use Th.
and access to confidential information of "local units" of government). 97.
391. 306 F.2d 270 (D.C. Cir.), cert. denied, 371 U.S. 902 (1962). (BART


I 1__1_-~---~~--- ~*Trr.l.~l~d~__








.- "P-----_




ol. 71:136June 197s] Comments 1435

Eblem. In Port of New York Authority, who had been found guilty of contempt
:f author- of Congress by the district court for refusing to produce certain sub-
1ew proj- poenaed documents in connection with an investigation conducted
y by the by a subcommittee of the United States House of Representatives.392
iarge au- Congress had consented to the interstate compact creating the Au-
itin t de thority but expressly retained "the right to alter, amend, or repeal"
its approval393 and was considering such action. The court sidestepped
-es,7 the the question of whether Congress could constitutionally reserve the
-ecords of right to amend or revoke its approval of an interstate compact. Rather,
-rlse, on the court held that the investigatory power granted to the committee
rollpayer by Congress was only intended to cover documents relating to the
ssing the actual activities and operations of the Authority. Therefore, "the ad-
rejected ministrative communications, internal memoranda, and other intra-
"public Authority documents demanded by the subpoena" were not required
Despite to be furnished.394
:hduct of Even if access to internal information about an authority is gained,
me legis- the public usually has no means of input into an authority's decision-
:s should making process more direct than the election of state representatives.
The lack of representation of various minority segments of society on
or of the authority boards may aggravate the problem of accessibility.9sg
'vest 1966), However, the impact of an authority's plans and policies on the
-e the or- public can be direct indeed. A new bridge may spark a building
extensive boom in a given neighborhood; a decision on the placement of a thru-
--Jecial dis-
.rS.s L.J. way interchange may cause a great fluctuation in property values;396
the availability of public transportation may dictate the commuter
a note 12, pattern and thus affect air pollution; and the availability of a water
supply linkage may be crucial to a new real estate subdivision.
Mctean, The concern about lack of public control is particularly acute in
-en exten- the case of multicounty authorities for three reasons: (1) their size and
astruction scope magnifies their impact; (2) they rely in part on property taxes
tive a fair and/or state funds; and (3) they have a potential for evolving into

ablic rela- areawide general governments or, at least, multifunctional "second
-nity rela- layers" of government. Perhaps for these reasons, multicounty au-
thorities have stronger provisions for control than most traditional
authorities.397
392. 195 F. Supp. 588 (D.D.C. 1961), noted in 62 COLUM. L. REV. 532 (1962).
Swas not 393. 306 F.2d at 271.
no repre- 394. 306 F.2d at 275-76.
-f money 395. In recognition of the problem of representation, the Boston Metropolitan Area
ztate and Planning Council is required to have among its council members sufficientt represen-
-ork City, station of minority and low-income groups so as to substantially represent their view-
Assembly points in the area to be served by the council." MAss. ANN. LAWS ch. 40B, 24 (Supp.
d at 10. 1971).
ee also 396. See PUBLIC ATHORITIES, supra note 3, at 56; Gulick, "Authorities" and How to
auditing, Use Them, 8 TAX REV. 47, 50-51 (19 17).
397. See text accompanying notes 109-10, 115 (MTA), 130-34 (MBTA), 146, 148-52
(BARTD) supra.


r)1`1~R~l*bl~e~l~













1436 Michigan Law Review [Vol. 71:1376 June 1973]

Assuming that, as seems probable, the ability of authorities to strictive a
plan for and meet service needs is enhanced not only by their jurisdic- case of the
tional flexibility but also by their corporate form and separation from sacrifice a
traditional general government, the dilemma is clear: To what extent and efficic
are the advantages of efficiency in providing a service more important of state z
than the maintenance of citizen involvement in, and ultimate control ance,40-
of, its operation? MBTA,
The answer to this question is finally a matter of judgment and
political philosophy. As has already been noted, the one person-one
vote doctrine does not constitutionally require any particular form of
control.808 Given that, there are three basic postures that a legislature Pub
could take. First, it could conclude that the advantages of economy, of munities
efficiency, and, perhaps, of obtaining financing that can be achieved projects
by separation from direct public control are critically important. authority
[ Many of the smaller authorities have been, and might reasonably con- certith
tinue to be, kept as autonomous as possible for this reason. However, certain
the impact of multicounty authorities is such that absolute autonomy cte
cities ant
r for them is undesirable. Car
Second, a legislature could conclude that authorities should be Careful
controlled by the public to the same degree as are local general gov- authoric
ernments. It may be argued that authorities are subverting constitu- comp la
tional debt limitations and that their organizational advantages, if relating
any, are outweighed by their inherent lack of public accountability. lic acqu:
The adherents of this position would turn the functions of author- amine
ities over to general governments.399 Alternatively, it may be felt that auteshor
the scope of some authorities so closely approaches the full panoply of trative
governmental powers that, while their separateness and form should Muc
be retained because of their jurisdictional advantages, their directors licab
should be elected by the people. The first of these two positions is un- pdifer i
convincing. Debt limitations are anachronistic,400 and their avoid- and the
ance is not the only basis on which authorities can be justified. More- and the
i over, not all authorities are important enough to merit full public within
accountability, and the impossibility of adequately controlling the nation
others is far from certain. The second argument must be accorded nr
more weight, particularly in the case of multicounty authorities, in- mais t
sofar as it suggests the need for public controls; that direct election of of mul
the board is the most desirable form of control is less clear. strains
The third position that a legislature could take, and the one most bodies:
| commonly adopted, is a middle course between these two, a balance author
between public accountability and operational independence. Indirecturisdi
control that is sufficient to protect the public interest, yet not so re- sejm u
seem u,
398. See generally text accompanying notes 206-65 supra.
399. For example, this seems to be the conclusion of Quirk & Wein, supra note 3, (12),
at 597.
400. See text accompanying notes 308-09, 311 supra.













rvoL 71:1376

norities to
.r jurisdic-
ztion from
:nat extent
important
.te control

-ment and
:erson-one
:3r form of
-egislature
-onomy, of
= achieved
important.
iably con-
However,
autonomy

shouldd be
reral gov-
_ constitu-
ntages, if
stabilityy.
fA author-
2 felt that
:anoply of
-m should
- directors
z-ns is un-
-ir avoid-
.ed. More-
I11 public
ailing the
accorded
cities, in-
,ection of

one most
a balance
-. Indirect
:not so re-


zpra note 3,


June 1973] Comments


strictive as to hamper efficiency, can be maintained. At least in the
case of the more technologically oriented services, it is reasonable to
sacrifice a certain amount of public control in return for economy
and efficiency. A great deal of experimentation with different forms
of state and local control is necessary to find an appropriate bal-
ance,401 and the variety of arrangements seen in the NYMTA, the
MBTA, and BARTD is a healthy sign.

VIII. CONCLUSION
Public authorities effectively fuse governmental powers and im-
munities with corporate organization. While it may be that more
projects have been turned over to them than is strictly necessary,
authorities do exist in great numbers and are certain to remain on
the local scene for the foreseeable future. At the same time, un-
certainties persist as to their legal status, powers, and liabilities.
Whether state legislatures create authorities directly or authorize
cities and counties to do so, they can improve the present situation.
Careful delineation of the powers, activities, and limitations of each
authority, old and new, is the minimum that should be asked. A
compilation under a single heading of all the statutes of a given state
relating to authorities, as New York has done,402 might facilitate pub-
lic acquisition of information and encourage legislatures to re-ex-
amine their over-all policy toward authorities. Perhaps uniform stat-
utes could be designed for such matters as annual reports, access to
authority records, and reviewability of decisions under state adminis-
trative procedure acts.
Much that has been said in regard to traditional authorities is ap-
plicable to multicounty authorities. But multicounty authorities do
differ in both their structure and their potential. Because of their size
and the vital functions that they typically perform, they magnify the
virtues and the vices of the ordinary authority. Moreover, they carry
within themselves the seeds of metropolitan governmental reorgani-
zation. In a sense, they represent a new strain of the species, and their
proper function and structure are not yet settled. Much work re-
mains to be done. Sharpening the analysis of the powers and duties
of multicounty authorities, experimenting with nondisabling re-
straints, and increasing public understanding of the role of these
bodies are among the most important tasks. On balance, the record of
authorities in efficient capital construction and operation and the
jurisdictional potential of multicounty authorities make the effort
seem worthwhile.

401. See A. BROMA;E, IOLITIC.U. RFPREF'NTATION IN METROPOLITAN AcF.NCIFS 78-99
(1962), for a discussion of alternatives in appointing or electing authority officials.
402. N.Y. Pun. AUTH. LAw 1-3002 (McKinncy 1970).


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