State Support for Distressed Cities — But Is it the Answer?
The New York Times covers the story of the many state-established programs that aim to help out financially-strapped cities. In the spotlight: Harrisburg, which just applied for Pennsylvania’s distressed cities program. The city will not be able to pay its payroll without funds from the program. Mary Williams Walsh writes:
The situation is particularly acute in Pennsylvania, where the flailing of a state capital has drawn considerable attention. Late last year, Reading joined the state’s distressed program. Ways to exit the program have often been elusive. Eleven municipalities have been in the state’s program for more than a decade. They were joined there five years ago by Pittsburgh.
Public finance experts say Pennsylvania’s “home rule” form of government, where tiny boroughs and townships have full municipal powers, make the problem knottier. If one local government takes the bitter medicine and raises taxes, residents can dodge the increase by moving a few blocks away.
Unfortunately, this has only encouraged the siphoning out of the cities, with residents moving to the suburbs in flocks. In turn, the cities’ tax bases have dropped significantly — making tax raises nearly inevitable. It’s an ugly cycle — one that affects every community at some point.
So is the solution state monetary help? Or can we do better? Municipal consolidation, anyone?