Panel addresses cities’ fiscal challenges
While the economy may be recovering according to some reports, four of the nation’s mayors still expressed concern for their cities’ futures during a Nov. 19 panel discussion with Vice President Joe Biden’s chief economic policy advisor. Points made by the panel members include the need to look beyond the temporary benefit caused by the American Recovery and Reinvestment Act (ARRA) and the permanent nature of changes cities have made to adjust to the economic downturn.
An “aggressive Keynesian stimulus,” including tax relief and federal investments in infrastructure projects, has brought the economy back from the brink of depression, Biden advisor and economist Jared Bernstein told panel members Philadelphia Mayor Michael Nutter; San Jose, Calif., Mayor Chuck Reed; Mesa, Ariz., Mayor Scott Smith and Bowling Green, Ky., Mayor Elaine Walker. However, Nutter was not as optimistic. “Hearing a presentation that the recession is over reminds me of a sign I saw one time a couple of years ago that said, ‘Mission Accomplished,'” Nutter says. “It is not happening on the ground, and there is continued deterioration at the local level, notwithstanding every bright economist — conservative, liberal or anything else. On the ground, we are still in the midst of declining tax revenues, figuring out how to reduce our employee costs.”
Reed said that, while the ARRA funding his city received was appreciated, the jobs it created were only temporary. “[ARRA funds are] creating jobs that only last as long as the federal government is willing to write the check,” Reed says. “And that’s why I’m focused on the Department of Energy loan guarantees and things that can go direct to industry who will create jobs that will go on forever and will spin off other jobs.”
Smith said Mesa was focusing on addressing the city revenue shortfall as more than just “a temporary blip.” “We decided that we were going to approach this problem as basically a change in our reality,” Smith says. “We needed to change things, and so we went to our department heads and set goals and set benchmarks that related to reducing the resources that were available — a nice way of saying ‘cuts’ — but maintaining service levels. In other words, we wanted to challenge our department heads to, in essence, change the way they did business. And we ended up, over the next three months, eliminating departments, consolidating departments, reforming, reinstituting, revising the way that we provided services. Nothing was off the table.”
View video of the event is available.