Lean and Mean

Despite some positive national news – like modest growth in GDP and consumer spending – it’s still hard to see much “stimulus” on the local level. Brookings recently released a report that examines the fiscal crisis in cities all over the U.S. and assesses a few different ways that city officials are responding. It’s worth a read. The short story is that things are still getting worse.  Revenues are way down and the majority of ARRA funds are targeted toward special projects, so most local governments are reducing services and laying off employees.  But some folks are coming up with creative responses and rethinking the way they do business.

Mayor Michael Nutter talked with several other mayors a couple of weeks ago in Washington.  They were telling anyone who would listen that the difficulties facing local governments aren’t likely to improve anytime soon. Local revenues are tied to jobs and real estate prices, both of which continue to lag overall economic recovery. And if you’re hoping for more intergovernmental cooperation, there’s some equally bad news. City and state governments have been at each other’s throats during this year’s budget fights, and things probably won’t be much better next year.

The Brookings report offers a few silver linings. It sounds like some local governments are using this crisis as an opportunity (however painful) to restructure their management, strategically modernize delivery systems, and reasses how they raise revenue. Plus, some ARRA funds are set up specifically to encourage regional cooperation – the Metropolitan Policy Project website lists a few good examples, including one about the Philadelphia region. It’s worth looking at what other cities are doing and thinking about what else could be done around here.

But that’s just the beginning – innovative policies are easier written than done, and probably easier to do in a lot of other places than around Philly.  We already know a few things that would make local government more effective and efficient, but we have our own special brand of political stagnation to deal with. The city was saved from “doomsday” by a sales tax increase and deferred pension payments – not exactly a recipe for the government of the future.  We might have to face some of these issues again, whether we’re ready or not. Never let a good crisis go to waste, right?