Friday, July 6, 2012

Solving Urban Crises.

Cities with failing economies can be saved through regional cooperation with their nearby regional communities.

There is a basic point to regional success. The urban areas supply the region with much of the population arts, culture, athletics, etc.. and are often where many higher education, employment opportunities, health care facilities and other opportunities enjoyed by the regional population exist. (Young people tell me more cooler people hang out in cities than in suburbs, which may be an insult to suburban youth who seems quite knowledgable about malls and video games.) These urban areas generally lack the tax base to meet the critical social needs and operating costs. (This means the greater poverty found in cities means the people in poverty don’t pay as much taxes as they would like, especially since many would prefer to have higher paying jobs that would allow them to increase their contributions to city revenues.) The suburbs, which resulted from government investment in highway systems, allowed more affluent urban areas to flee  urban areas and create communities with fewer per capita social needs and operating costs. (Next time, let’s see how many leave cities if we build pedestrian underground tunnels instead of highways.)

Much of the urban tax base over the last half century shifted from cities to suburbs. Many of the social needs concentrated more in the cities (sadly some of those cool urban people have social needs), leaving less affluent city residents with higher taxes to pay for these social needs. This created a cycle of those who could afford the leave the city for the suburbs doing so while leaving a diminishing tax base to deal with increasing costs. While this is an over-simplification, and there are examples where these dynamics differed and there has been some movement back into some cities (in part to hang out with those cool urban people even if they have social needs), this is a basic general summary of the cause of regional problems.

Several cities have inbuilt regional cooperation, such as the five merged boroughs of New York, while others cities such as Indianapolis economically survived by annexing its suburbs. Such mergers allow a shared tax base to benefit the entire region. This also results in benefits from eliminating duplications of government operations that are consolidated and allows economies of scale where a larger public sector may purchase goods and contract services at lower overall costs.

New York City faces a similar problem several decades ago. Despite how many people remember a famous newspaper headline believing that President Ford told New York to “drop dead”, it actually was state and Federal government actions that bailed New York City out of its fiscal crisis and allowed it to rebound (maybe Ford only wanted New York to see how long it could hold its breath). Today, New York City is one of our nation’s strongest urban economies.

In sum, a city with a tax base insufficient to fund its basic services will need to find assistance from outside. It is to the benefit of the living near and around the city to see the city’s social needs are met. Otherwise the problems will create a regional crisis. Regional cooperation can prevent that regional crisis.

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