Two web articles caught my eye recently. They’re both new takes on a frustrating theme: municipal bankruptcy and community deterioration.
The first focuses on a poster child for municipal bankruptcy: Detroit, Mich. Chapter 9 proceedings for the Motor City’s case came to a close in late 2014, and Wayne State University’s WDET.org posted a thoughtful blog Nov. 30 about the questions it raises regarding the state’s responsibility in such situations. In the post, Michigan Municipal League Chief Operating Officer Tony Minghine paints a picture of communities handcuff ed by a state that for 50 years has pushed budget problems down the line to its municipalities, which are now collapsing under the suffocating weight.
The underlying, broken finance model isn’t just Detroit specific, Minghine is quoted as saying, but really statewide. “… People don’t really realize that we have a system that doesn’t really set communities up for success,” he adds.
Harrisburg, Pa., owes its bankruptcy in part to the same kind of debt fraud that brought down Detroit. The state is in the process of trying to install safeguards to prevent the kind of transactions that led to Harrisburg’s troubles. One journalist, Steven Malanga, senior fellow at the Manhattan Institute and senior editor of City Journal, has pointed out that if lawmakers balk at being as responsive as Pennsylvania in the face of a need for finance reform, citizens can and should take action as well, using tools like a ballot referendum.
Reflecting on the heart of the Harrisburg ordeal and its legacy, Malanga said in a Pittsburgh Post-Gazette piece:
“A Pennsylvania newspaper once described (former mayor) Stephen Reed as a mayor who ‘never met a bond deal he didn’t like.’ Give a politician the chance to pile up debt on favored projects without answering directly to voters, and no one should be surprised if he takes advantage of it. That’s why the history of state and local finance is filled with reform moments.”
Certainly, there’s a groundswell of support for making the most of the reform moments dotting the map of municipalities across the country today. The conversation should be about how states can better shore up the underpinnings of their well-being: their cities and towns. It seems to me that the alternative is kind of like having healthy legs, but two injured feet. You can’t walk, jump, dance or ride a bike in that condition, and our cities can’t thrive that way either.
Minghine, too, gives a nod to the fact that we’re trying to operate with municipal budgets that “would have been appropriate decades ago, but are not enough to meet today’s community needs as the costs of providing services continue to increase.” You all know how that feels.
On page 28 of this issue of The Municipal, see how financial desperation is manifesting itself in Missouri. There, cities and counties are facing off over a sales tax that was challenged in court and demonstrating just how finance constraints are giving way to tooth-and-nail budget battles that aren’t likely to dissipate soon.
Finance reform needs to be addressed now before more of our budgets collapse. We’re out of the crisis mode brought on the by recession: I hope we’re using this time of greater calm to lay the groundwork that will force much-needed changes in the relationships between states, municipalities and their critical financing issues.