Which has the silly implication that there are no other cities under your state, or your state has no industry for producing construction materials and educating construction workers domestically outside of this specific city.

You do spend a lot less money if you do have other cities under your state, but that's usually not the case if you start a new game on a random map though. You can set up a custom map with a starting city tho (it's sometimes hard to get to a stage where sewage works on an edit-map since you can't test the sewage system as you go along)