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November 18, 2009
American cities facing challenges
As the United States grapples with the worst job losses since World War Two, the nation’s cities need to be centers of solutions and incubators of private sector jobs. Yet, with government bank balances at all levels in the red, finding the resources to provide infrastructure and even maintain basic services will be challenging. Municipalities may be forced to cut payrolls, which will make it that much harder to provide a fertile place for employers and employees.
The Brookings Institute will be hosting a forum on November 19 2009 at 9AM– that will be live streamed (and re-playable)– related to this issue, involving mayors, the Wall Street Journal and even VP Joseph Biden.
The discussion will focus on the deepening fiscal challenges many cities face, the adjustments that will be required in 2010 budgets, and the and the tough choices on city services and payrolls that may drag down national jobs numbers and economic recovery.
In the meantime, here are my thoughts on the big issues for American cities:
The US is facing the need for structural economic change, finishing the shift from an industrial economy to a knowledge and experience based one. The latter requires dynamic, vibrant cities filled with talented people and clusters of different companies doing innovative things.
But, how to get there from where so many cities are — that’s a big question. I look forward to hearing what the Brooking’s Institute’s forum participants come up with. But I can’t help but think the challenges here generally cannot be solved at the municipal level alone — it’s a national economic structural shift that needs to happen, and will require a devalued currency, inflation, and perhaps a decline in living standards for millions of Americans.
Topics: national politics, urban history, economic development |
November 19th, 2009 at 10:54 am
American cities have an obligation to their voters and not the land within their city limits. Their “home rule” status gives them a powerful tool to raise money by going into business rather than trying to raise property values. Convention centres, stadiums, and utilities are all businesses American cities run for profit to lower the property tax burden on the voter. They also depend on business taxes, such as the business personal property tax. It’s a tax on a businesses capital equipment. Now that business in general is in decline so are the revenue sources for American cities. Major service cuts are inevitable, but what will the outcome be? Municipalities less NIMBY about intensification to increase property values or ever bolder revenue raising schemes that avoid voter backlash. Contrast the “home rule” municipalities of Michigan to the property tax driven municipalities of Ontario to understand the advantages for a city that focuses on property value rather than voter objections.