David Eichenthal is executive director of the National Resource Network and a managing director with the PFM Group.
Petersburg, Va., is in dire straits. High poverty and population decline have limited the city’s tax base, and the absence of strong fiscal and financial policies left it unable to pay its bills. To avoid insolvency, municipal leaders have had to take unpopular but necessary action: cutting public services and raising taxes.
When I proposed these measures to Petersburg’s City Council and the public in August, city leaders rightly asked whether there was a path forward. There is. The tough choices that Petersburg makes today are the first steps toward fiscal and economic recovery. With a stable local government and a truly balanced budget, Petersburg can begin to forge new partnerships and embrace its significant competitive advantages: its deep history, beautiful and affordable older housing stock and the nearby location of key anchor institutions and Fort Lee.
Although the depth and immediacy of Petersburg’s fiscal problems are unique, what ails it mirrors similar crises in hundreds of cities across the United States. The economic and fiscal challenges they face are not a hot-button issue on this year’s campaign trail — but they should be. Without a clear national policy to help repair our cities, we will continue to fight an uphill battle against poverty and crime, racial inequality and income disparity, an unskilled workforce and the achievement gap in education.
Three hundred cities with a population of at least 40,000 — and others like Petersburg that are slightly smaller — have struggled to recover from the Great Recession. Many of these cities suffered economic hardship well before 2008. Suburbanization and deindustrialization have led the Garys, Youngstowns and Flints — onetime engines of the industrial Heartland — into decades-long decline. But many cities across the nation face local economic and fiscal challenges as well. Decline has deteriorated tax bases and produced skyrocketing demand for city services, plunging local governments into an oppressive cycle of structural deficits that may be exacerbated by bureaucratic dysfunction (or, worse, corruption).
Some of these cities still wield significant economic strength but remain beleaguered by entrenched poverty. Others lack the basic operations and structure to partner effectively with their county, state and federal counterparts — let alone leaders in philanthropy, business and higher education — in turnaround efforts. Moreover, many city governments have allowed legacy costs to devour their budgets and stifle investments in critical community and economic development projects.
To revitalize these cities and provide a better future for the millions of Americans who call them home, we need a new way of doing things.
Over the past three years, a consortium of urban experts from the private, nonprofit and academic sectors has worked to equip local governments with innovative strategies to build operational capacity, foster collaboration among stakeholders and boost competitiveness to produce economic benefits. Launched under the auspices of the White House Council on Strong Cities, Strong Communities and backed by the Department of Housing and Urban Development, the National Resource Network is the only federal program that provides comprehensive technical assistance to cities, including guidance on fiscal management. The network offers the playbook and the coach, helping city leadership set realistic priorities, goals and a starting point for the recovery process.
Early results have been encouraging. In Providence, R.I., network experts worked with Mayor Jorge Elorza (D), city administrators and policymakers to develop a 10-year financial plan to eliminate structural deficits and increase investment in education. In Waco, Tex., the network partnered with the city to advance poverty-reduction efforts. Similar success stories span from Richmond, Calif., to Miami. The network’s model is gaining notice at the state level, too. Massachusetts recently launched a pilot State Resource Network to build on existing turnaround efforts in its cities.
Of course, no amount of assistance can substitute for strong local leadership. Without leaders who are willing to face challenges head-on, there is relatively little that outside experts or any other partners can do to help effect real change. Ultimately, though, this emerging model has the potential to redefine how federal and state governments engage with all U.S. cities. And it can provide a template for places such as Petersburg to turn to as they make tough choices to reverse decline and follow a path to prosperity.