However today's referendum turns out, Cleveland will be remembered by many as comic relief in a dreary snowbound winter. A lot of people have been laughing at Cleveland. They won't be laughing tomorrow.
The comic-opera side of Cleveland's predicament disguises the real tragedy that exists there and that is building in other American cities. With the best management in the world, Cleveland would still be in trouble. And cities with similar fiscal characteristics should take heed.
Although most city governments strengthened their finances in 1978, Cleveland's year-end financial nose dive underscores the continued precariousness of some older Northern cities. Many recent articles on Cleveland have focused narrowly on the city's political troubles. The more important question is whether Cleveland's predicament is. unique or whether it reflects a trend toward severe city problems or outright fiscal failures in the near future.
This question is crucial at a time when the direction of the overall economy is at best unpredictable and when the safety net for cities -- in the form of increased federal aid --cannot be assured. President Carter last fall put the nation's mayors on notice that their cities could expect little new federal aid in his 1979 budget. Moreover, he asked the cities to support his anti-inflation program, a program expected to cause a slowdown in the national economy. While the president in his 1979 legislative objectives has put forward a program of "targeted" direct aid to cities, assistance generally will. be less than in previous years.
Those urban areas most likely to be caught in the vise of reduced federal aid on the one hand and economic slump on the other are predominantly the older, industrial cities of the North -- the "Industrial Crescent" -- that have the unfortunate combination of deteriorating infrastructures (streets, sewers, water systems), outflows of business and industry, residents and jobs and the inability to capture a broader tax base through annexation.
Cleveland has had these problems in abundance. Recent Census Bureau figures place Cleveland second in the nation -- behind New York and before Pittsburgh and Newark -- in total population loss. Between 1970 and 1976, the city lost 125,000 residents. Since 1969, industries representing 17,000 jobs a year have moved out. Increasingly, the people left to inhabit the urban core are those with the lowest incomes and the greatest problems and needs.
In fiscal 1977, Cleveland received $93 million in federal aid, but most of that was earmarked for specific programs, not for shoring up the city's financific foundation. The income-tax rate, the subject of today's referendum, is 1 percent -- low in comparison with many Northern cities. In addition, Cleveland is situated in a state that doles out few state dollars directly to cities. Though generally unrestricted, such state aid is low -- $27 million in 1977 out of a total of $319 million in city expenditures. Like many cities, Cleveland has relied on the infusion of federal dollars to pay for the incremental cost of regular services, rather than for investment in its capital infrastructures, leaving the city perilously vulnerable to the inevitable pendular swings of federal aid.
Are these conditions -- deteriorating infrastructures, loss of population and business, and erosion of the tax base -- duplicated in other cities? Are they indications of a new wave of city failures? It is true that a number of older industrial cities have experienced extreme population decline in recent years. Buffalo, Cleveland, Detroit, Pittsburgh and St. Louis have all experienced population losses exceeding 20 percent in a 15-year period. And, in cities that tax, fewer citizens mean fewer dollars.
City spending for the maintenance and repair of essential infrastructures among older Northern cities has slowed generally over the last decade. Many of these cities -- such as Cleveland, Newark, Pittsburgh and Detroit -- have allowed their streets, sewers and water systems to deteriorate as a response to tightening resources. Moreover, federal aid, which could have bolstered this stock of public capital, has often been diverted into ongoing city services such as fire and police protection and financial administration.
These conditions found their locus in Cleveland. The mayor's populist, anti-business stance, coupled with a campaign promise not to increase taxes, locked his city into a certain confrontation with default. Except for Ohio's particularly low level of direct city aid, however, Cleveland's financial picture is mirrored in a number of cities in the North, many of which are living through the same pattern of diminishing central-city populations, reduced numbers of city businesses and escaping tax bases.
The lesson of Cleveland is not that older industrial cities can now heave a sign of relief, grateful that the financial dragon is not currently at their door, or that Cleveland is merely a harmless caricature of urban problems -- sad, larger than life but somehow laughable. The more accurate perception is that Cleveland is sounding quietly the alarm that in a nation now hunkering down for a long winter of restrictions on federal aid and a probable economic downturn, many of our cities may find themselves among the most severely affected casualties and the least able to cope.
Faced with these conditions, cities traditionally have had few short-term solutins. And those solutions -- increased taxation of individuals and business, and increased federal aid -- are becoming less and less practicable, if the message of Proposition 13 and Carter's budget-cutting programs are to be believed. Long-term approaches must attack the underlying causes of fiscal collapse -- the tottering infrastructures, the unbalanced budgets, the financial merry-go-round of diverting funds intended to strengthen the enduring asset of city capital to pay for more immediate operating costs.
It is clear that the seeds of acute need already exist in may of our nation's cities. New York's Mayor Edward Koch, Newark's Mayor Kenneth Gibson and Cleveland's Mayor Dennis Kucinich have been wrestling with employee lay-offs and discontinuation of some city services and programs as they attempt to meet their cities' immediate financial obligations and to fashion balanced budgets. These conditions are indeed the hallmarks of an "urban crisis" in our older cities, conditions that will demand new austerity measures and tough-minded decision-making.
Cutting city workforces and programs is difficult for city leaders, particularly during a period of economic uncertainty. But even that is a shortterm solution, necessary but not sufficient.
What may be sufficient -- and even more arduous -- is taking action now to sustain workable urban cores in the long term. This means strengthening and maintaining the streets, water systems, transit facilities and other capital investments of cities. And it means taking steps to attract and hold tax-producing private enterprise to city centers. Such measures will require uncommon courage on the part of city leaders and uncommon understanding and forbearance on the part of the electorate. Such uncommon behavior by those in government and the people who elected them would be a crucial element in the efforts of many fiscally weary Northern cities to build more secure and prosperous futures. Full disclosure of city fiscal problems, and avoidance of planting the seeds of tomorrow's fiscal problems in today's budgets, will help avert financial crises of the magnitude of New York in 1975 or the political disarray of Cleveland now.