The City’s Fortune Depends on It

Among subjects of continuing public attention, none resonates like the size and efficiencies of local government. For some months now, a citizens group under the leadership of Mark Nordenberg, chancellor of the University of Pittsburgh, has been investigating the potential merger of city and county government, either in total or in part.

I cannot recall a time in the last 30 years when municipal reorganization in some form was not front and center, but this latest investigation is particularly comprehensive and determined.

It is in this spirit that I want to share some governmental indicators whose substance may come as a surprise. But before getting to them, let me recommend a new report from the Boston Foundation, one of the national leaders in regional indicator work. Boston Bound (on the Web under that name) is a comprehensive analysis of state law with chapter and verse on how itimpedes economic and social progress in Massachusetts’ principal city. Its main contention is that Boston has spilled over legal bounds established decades ago and is operating in a global economy with one arm tied behind its back. The authors compare Boston with six other cities: New York, Chicago, San Francisco, Denver, Seattle and Atlanta. They say each can do for themselves what Boston cannot, though none can do everything on the authors’ list of powers Boston needs. See Figure 1 to see the comparisons.

What jumps out are the urban core/suburban disparities. With the exception of New York, growth rates outside the core city are very much higher everywhere than in the core city.Second, despite this reality, all seven core cities experienced population increases between 2.6 percent (Boston) and 18.6 percent (Denver) during the decade 1990-2000. Square miles may be a factor in core growth rates, but Seattle and San Francisco clearly demonstrate that it is far from determinative. The authors argue that Boston regional population growth has been relatively low compared to the other six cities, in part because of the legal straitjacket under which the core city operates. Whether that is valid or not is debatable, but there is no doubt that a core city’s vitality is a key determiner of regional vitality; they go hand in hand.

What does this have to say about the need for local governmental reorganizations? For starters, see Figure 2. I have selected four additional legal powers from the Bostonians’ 17-item wish list that would be necessary here if Allegheny County were to assume a more central role in local core governance that is more than cosmetic. A shift of power from Harrisburg to the newly constituted city would be a necessity if the region is to be organized for the 21st century.And take another look at Figure 1. Could the City of Pittsburgh’s dilemma be more dramatically illustrated?

Boston is worried about itspopulation increasing a paltry 2.6 percent between 1990 and 2000, while Pittsburgh dropped 35,316 or 9.5 percent during that period and another 19,744 in the past six years, for an estimated total contraction of 14.8 percent. To appreciate how skewed the local reality is, consider Denver and Seattle. Both are Pittsburgh’s size and both also have experienced three decades of sprawl. The difference is that while their core cities in recent years have been growing only at half the rate of their suburbs, they are still growing.Here the demographic experience has been reversed, both down, but the city/county ratios have also changed with the city experience bordering on crisis: The regional population down 14.8 percent since 1990, from2.468 million to 2.370 million or 3.9 percent; the City of Pittsburgh population down 55,060 or 14.8 percent.

As obvious as the need to reverse course is (in Boston and here), getting the necessary changes in the law will be a political long shot for Pittsburgh. This quote from Boston Bound’s executive summary could very easily apply to the situation here, both past and present:

“. . . officials have long complained about the city’s lack of power, especially its restricted ability to raise revenue. But the city’s complaints have largely been to no avail, in part because the issue has so often been framed in terms of the city’s need to avert fiscal crisis.As long as requests for greater home rule are made in terms of Boston’s immediate financial circumstances, its complaints are likely to reinforce the popular view that city officials are simply trying to avoid hard budgetary choices.”

Sound familiar? You can hear someone saying, “Pittsburgh’s problem isn’t state law, it’s bad spending choices. It’s sweetheart deals with bus drivers, backroom deals with firefighters, new stadiums, cockeyed urban renewal schemes and corporate welfare in the form of tax increment financing deals instead of local tax cuts. See us about changes in the law when you get spending under control.”

Yes, expanded municipal boundariesin the manner of Louisville or Indianapolis are an attractive possibility, but that’s not likely to make much difference here unless the new governmental entity has taxing and legislative authority that Pittsburgh has only in limited fashion (assuming it is out of receivership) and Allegheny County government has only in its dreams.

Now for those governmental indicators. The seven-county Pittsburgh region may have more local governments per capita than any major region in the nation. (See Pittsburgh Quarterly, Winter 2007 and governmental indicators on Pittsburgh Today.) But if you look at municipal finance indicators in that same section, you may be surprised that:

1. Pittsburgh taxes are not high. When school, municipal and county taxes rates are combined, only five benchmark cities tax at a lower rate per capita than Pittsburgh. See Figure 3.

2. The revenues raised per capita are higher than you’d expect given the relatively lower rates for taxes per capita. Pittsburgh is in the middle of the pack among benchmark cities in total revenues per capita. See Figure 4.

3. Pittsburgh ranks last among benchmark cities in local expenditures for police protection. See Figure 5. (Fire protection expenditures are also last, not surprising given the primary role of volunteer fire companies in Pennsylvania.).

4. Municipal and county (but not state) expenditures per capita for streets and roads are lower than all but three benchmark cities, Boston, Charlotte and Richmond. See Figure 6.

5. Per capita expenditures for primary and secondary education are below average. This number is different than expenditures per pupil, a higher number because students per capita in the region is lower than most benchmark cities, a product of a population that is older than average. See Figure 7.

6. Pittsburgh leads the pack in one municipal finance category, interest expense per capita on debt.At $352 per capita interest expense, Pittsburgh is almost twice the benchmark city average of $196 in interest per capita and $41 ahead of Denver, which ranks second in per capital interest on debt. See Figure 8.

These indicators strongly suggest that while Pittsburgh has a great deal of government, it does not invest much in that government with the result that it has long been getting from government about what it has been paying for. Does that affect the region’sprospects as a global competitor? Obviously. Thus, no matter what transpires in the coming months with reform proposals, data from Boston and Pittsburgh strongly argue there is a a lot to talk (and do something) about when it comes to local government and its influential role in the region’s economic and social fortunes.