Tense Commandments: Federal Prescriptions and City Problems / Edition 1 available in Paperback
During the past decade, dozens of large cities lost population as jobs and people kept moving to the suburbs. Despite widespread urban revitalization and renewal, one fact remains unmistakable: when choosing where to live and work, Americans prefer the suburbs to the cities. Many underlying causes of the urban predicament are familiar: disproportionate poverty, stiff city tax rates, and certain unsatisfactory municipal services (most notably, public schools). Less recognized is the distinct possibility that sometimes the regulatory policies of the federal governmentthe rules and rulings imposed by its judges, bureaucrats, and lawmakersfurther disadvantage the cities, ultimately burdening their ability to attract residents and businesses. In Tense Commandments, Pietro S. Nivola encourages renewed reflection on the suitable balance between national and local domains. He examines an array of directive or supervisory methods by which federal policymakers narrow local autonomy and complicate the work urban governments are supposed to do. Urban taxpayers finance many costly projects that are prescribed by federal law. A handful of national rules bore down on local governments before 1965. Today these governments labor under hundreds of so-called unfunded mandates. Federal aid to large cities has lagged behind a profusion of mandated expenditures, at times straining municipal budgets. Apart from their fiscal impacts, Nivola argues, various federal prescriptions impinge on local administration of routine services, tying the hands of managers and complicating city improvements. Nivola includes case studies of six cities: Baltimore, Philadelphia, New York, Chicago, San Francisco, and Los Angeles. He describes the "politics of paternalism," the political pressures that federal regulations place on governance. Then he offers comparisons with various political systems abroad, including Germany, the U.K., France, and Italy. As the nation and its cities brace for a long and arduous effort to combat terrorism, Nivola recommends that federal mandates be evaluated with a standard question: are they socially beneficial, or do they deprive localities of discretion, distort legitimate local priorities, and perhaps misallocate resources? In today's intricate federal system, the unencumbered capacity of governments at all levels to define their roles and concentrate on their core functions and responsibilities seems urgent.
|Publisher:||Brookings Institution Press|
|Edition description:||New Edition|
|Product dimensions:||6.00(w) x 9.00(h) x (d)|
About the Author
Pietro S. Nivola is a vice president of the Brookings Institution, where he is the director of Governance Studies. Among his previous books are Tense Commandments: Federal Prescriptions and City Problems (Brookings, 2002) and Agenda for the Nation, coedited with Henry J. Aaron and James M. Lindsay (Brookings, 2003).
Read an Excerpt
Tense CommandmentsFederal Prescriptions and City Problems
By Pietro Nivola
Brookings Institution PressCopyright © 2002 Brookings Institution Press
All right reserved.
Each year the U.S. government publishes a report called The State of the Cities. The final year of the twentieth century was a very good one. Thanks to "the Clinton-Gore economic policies and effective empowerment agenda," the end-of-the-millennium edition proclaimed, "most cities are showing clear signs of revitalization and renewal." Yet, the authors conceded, even in that time of great prosperity the nation's central cities still faced "challenges."
Challenges? During the 1990s dozens of large cities-including such major centers as Baltimore, Cincinnati, Cleveland, Milwaukee, Philadelphia, Pittsburgh, St. Louis, and Washington, D.C.-continued to shed inhabitants. Sprawling suburban subdivisions still accounted for more than three-quarters of all new metropolitan growth. Although many other cities finally managed to regain population, few kept pace with the growth of their suburbs.
Disparities in growth between the metropolitan core and its outlying counties remained wide by other measures as well. Despite thousands of acres of abandoned land at the cores of the thirty-nine largest metropolitan regions, permits issued for construction of new housing units in1998 were still down from their level in 1986. The volume of permits outside the core areas was about four-and-a-half times larger.
Suburbs captured the bulk of employment growth. One study of ninety-two metropolitan areas found that, although 52 percent of their central cities began netting some increase in private sector jobs between 1993 and 1996, 23 percent did not, and fully 82 percent of the cities recorded a declining share of private employment in relation to the rest of their respective regions. The nation's capital, for example, started the 1990s holding at least a third of its metropolitan area's jobs. Seven years later the city held less than a quarter. Although Atlanta by comparison was a thriving city, its share of jobs also dropped dramatically, from 40 percent in 1980 to 24 percent by 1996. From 1994 to 1997 the central business districts in Ohio's seven major cities had a net increase of only 636 jobs. The suburbs of these cities added 186,410 new jobs.
In absolute terms the enclaves of poverty left behind in the inner cities by the unending dispersal of people and jobs to distant peripheries shrank in the 1990s. This was no small accomplishment, but it scarcely changed the fact that poor people remained a substantial percentage of the resident populations of many cities. At long last the strain of sustaining these dependents had diminished almost everywhere, including urban counties where dependency declined by more than 40 percent between 1994 and 1999.8 But it remained no less true that cities were still the locus of disproportionate caseloads in comparison with surrounding communities. Orleans Parish in which the city of New Orleans is located was home to just 11 percent of Louisiana's population but 29 percent of its welfare recipients. Philadelphia County had 12 percent of Pennsylvania's people but 47 percent of all Pennsylvanians on welfare. Baltimore accounted for 56 percent of Maryland's welfare cases. Nearly two-thirds of all welfare recipients in the Washington metropolitan area were clustered inside the District of Columbia.
The depopulation, impoverishment, and decay of much of urban America, however, had abated. Whether the decline would be durably halted, let alone lastingly reversed, is another matter. For the calamity of September 11, 2001, dealt a severe setback not only to New York and Washington, D.C., but to cities across the land. The terrorist assaults, arriving as the national economy had already started to falter, wiped out almost 80,000 jobs in New York and sent the unemployment rate in the District of Columbia toward double digits. The economic shock waves rippling out from "ground zero" would also shatter hopes of robust growth through 2002 for places as far away as Miami or San Francisco. Even if none of this had happened, the central fact of the urban scene in the United States remains as unmistakable today as ever: far more Americans, when choosing where to live and work, still locate outside old cities rather than inside them. If anything, save for anomalies like New York in recent years, the margin of difference continues to widen, not narrow.
Most of the underlying causes of this country's urban predicament are familiar. Among them are disproportionate poverty-hence crime and blight-in the inner cities, some lingering barriers to racial or class assimilation in the suburbs, a cultural preference for the suburban way of life, stiff city tax rates heightened by the costs of supporting large unionized bureaucracies and the unsatisfactory public services some of them deliver. Less recognized is the distinct possibility that sometimes the regulatory policies of the federal government-the rules and rulings that its judges and bureaucrats, as well as its lawmakers, impose-further disadvantage the cities, hobbling their ability to attract residents and businesses. These complications are the focus of this book.
Arguably the burden of what a former mayor of New York had called the federal "mandate millstone" may have diminished a little by the end of the 1990s thanks to attempts at self-restraint by policymakers in Washington but also because municipal economies were mostly faring better. How much weight was really lifted, and whether alleviating more of it would have left the cities in an even stronger position today, remains an open question.
"Shift and Shaft"
City governments in the United States, unlike municipal administrations in most of Europe, must largely support themselves; they collect approximately two-thirds of their revenues from local sources. German localities derive less than one-third of their income from local revenues. Britain's local councils are now responsible for as little as a fifth of their budgets for basic functions. The locally sourced share is even less in the Netherlands and, until recently, Italy.
In principle the relative self-sufficiency of local government in America is a virtue; municipal taxpayers ought to pay for the essential services they use. But in practice these taxpayers are also asked to purchase plenty of other costly projects, many of which federal law prescribes. A handful of national rules bore down on local governments before 1965. By the 1990s hundreds were weighing down on them. Meanwhile federal aid to large cities was shrinking. Mayors became alarmed by the confluence of these trends and so was the U.S. Advisory Commission on Intergovernmental Relations: "The financial burdens imposed by federal laws and regulations," the commission stressed in a 1993 report, "have been increasing faster than the growth of federal aid since 1986." While affluent jurisdictions absorbed this cost shifting with minimal disruption, communities of lesser means-notably many old central cities in the Northeast and parts of the Midwest-experienced difficulties.
Cities with large concentrations of low-income households and shaky sources of taxable wealth, of course, are squeezed the worst. A few of these desperate places (Bridgeport, Connecticut, for instance) became insolvent. The extreme exceptions aside, however, bankruptcy has not been the first problem that the profusion of federal prescriptions typically posed. Rather, their cumulative, lower-profile effects have complicated basic municipal management decisions, including those pertaining to taxing and borrowing. According to a study by the National League of Cities, nearly 40 percent of the hundreds of cities it surveyed reported that their financial needs had become harder, not easier, to satisfy at the end of the 1990s. Evidently the era's economic boom had not generated sufficient growth of local revenues in about one out of five of these cities, so property tax rates rose yet again in 1998.21 That year a group of prominent mayors repeated their long-standing complaint about how Washington's unfunded mandates tended to "destabilize" municipal budgets.
The following figures tell a good deal of the fiscal side of the story. Federal aid to large cities declined in constant dollars between 1980 and 1998, the last year for which reliable data are currently available (figure 1-1). To be sure, support from state governments and increases in locally collected revenues helped offset the federal reductions, but at least in large Frost Belt cities through 1998 the local increases were not large-and in some cases, not large enough (figure 1-2). Meanwhile, externally imposed claims on municipal resources often outpaced the latter's modest increases in these cities. Glance at one example: municipal wastewater treatment. Adjusting for inflation, local expenditures to build and run treatment plants up to federal standards ballooned from about $7.5 billion a year in 1978 to more than $23 billion a year in 1998.23 Federal funding to offset this kind of huge annual invoice dwindled (figure 1-3).
The strain in certain cities was much greater than the aggregated figures suggest. Revenues in constant dollars available to Detroit, for example, had contracted until 1998, even as this troubled city faced new multimillion dollar expenses piled on by federal and state authorities (figure 1-4). And as revenues sagged, so did bond ratings. Thus cities such as Detroit remained hard pressed not only to defray their new obligations directly but also to meet them by borrowing.
Increases in federally mandated expenses exacted a toll in more prosperous places too. Before New York City's financial health was battered in the fall of 2001 the city estimated it would have to finance at least $8 billion in mandatory capital expenditures for water-quality projects alone in the next ten years. New York will have to pull off investments of this magnitude amid already mountainous debts and with a tax system that probably has reached the limits of its capacity. At a minimum the added financial commitments facing cities like New York seem likely to force municipal officials to forgo further rounds of badly needed tax reductions.
Finances aside, some mandates impinge directly on local administration of routine services, tying the hands of managers and at times thwarting improvements that the beleaguered taxpayers in cities consider past due. For middle-class households and businesses contemplating where to locate in metropolitan areas, these circumstances do not enhance the allure of the central cities.
Exemplifying the Problem
America's urban public schools are perhaps the clearest example of a crucial local service beset by bureaucratic rules and legal sanctions, including numerous federal directives. Few other advanced nations, if any, devote as large a share of their total public education expenditures to nonteaching personnel. There may be several excuses for this lopsided administrative overhead, but the growth of government regulation, and the throngs of academic administrators needed to handle the red tape, is almost certainly at least one explanation.
For decades, U.S. urban schools systems labored under forced busing orders. Many of them had the unwanted result of stimulating "white flight" to the suburbs. Even as these legal pressures gradually subsided, newer ones mounted. Increasingly the schools would need to supply various specialized services. Local authorities, for example, must set aside tens of billions of dollars a year to meet the needs of students with learning disabilities. Congress, which fashioned this expensive program known as special education, has never reimbursed even a quarter of its yearly bill. Meanwhile, the number of clients swells as definitions of disability take in behaviors that in an earlier time were not considered clinical abnormalities-and as teachers, parents, and administrators dump their faltering students into the program.
Compliance costs are especially onerous for city schools, where the concentrations of learning-disabled pupils are high and the means to support them low. The District of Columbia is forced to spend roughly a third of its entire education budget on students eligible for special education, a clientele that constitutes 15 percent of the school system's overall enrollment. In 1997 just over 17 percent of Baltimore's school children qualified for the program, reportedly costing the Baltimore school district as much as $221 million-again, one-third of the city's school budget. Chicago's public schools enroll more than half of all the special education students in the state of Illinois. Federal and state aid has fallen far short of what is needed to support this overload. And when a school system has to hire legions of counselors, therapists, administrators, and lawyers, how can it also afford to recruit what it needs most: competent teachers? The Chicago school district had to dig deep into the pockets of its taxpayers for many hundreds of millions of dollars in property tax increases between 1988 and 1993.
Wretched schools have been among the main reasons why American families have fled, or avoided, old cities. It is hard enough for distressed city school systems, which struggle to impart even rudimentary reading and arithmetic skills, to compete with their wealthier suburban counterparts. The hardship is surely compounded by federal entitlements that without adequate recompense increasingly divert the scarce resources of cities from better serving the majority of their citizens. Amid the centrally directed priorities and their fiscal impacts, it often becomes harder for local school boards to undertake essential innovations. Not long ago an in-depth study of six large urban school districts-Boston, Memphis, New York, San Antonio, San Francisco, and Seattle-found that reform-minded city officials were stymied first and foremost by inadequate financial capacity and flexibility.
Plan of the Book
Although this book is not long, it could have been shorter if the national government's voluminous commands and controls indisputably brought too few benefits to city dwellers. But the bottom line is a matter of much dispute. There are many good reasons for federal policymakers to be telling city governments what they must or must not do, even if city officials deem many of these strictures unaffordable or overbearing. Although the local objections frequently are to be taken seriously, sometimes they turn out to be decidedly unconvincing-and an overall assessment cannot help but be fraught with debatable judgments as to how competing values ought be traded off, empirical evidence weighed, and urban impacts quantified. I attempt no such rigorous appraisal. Instead, I divide a frankly impressionistic critique into two parts, taking a general sweep in chapter 2, and then getting down to cases by examining in chapter 3 some experiences of particular cities.
Underlying such stories are the political pressures that, in varying degrees, thrust federal regulators into local governance. The incentives to intervene from the top are complex and somewhat different from those in other democracies and have gained momentum that has been at best only mildly suspended in recent years. This phenomenon-what I call the politics of paternalism-is the subject of chapter 4. Some readers may wonder why that chapter pulls back from a narrow concentration on the urban setting and tours instead the broader contours of American federalism that, for the most part, show the ascent of national power not only over city governments but local politics generally. But I regard this broad-brush treatment as a helpful supplement. An understanding of why any city mayor might begrudge Washington's infringements on the ability of his or her city to govern itself is ultimately inseparable from an appreciation of the centralizing forces at work in the federal system as a whole.
Chapter 5 offers some brief, basic comparisons with political systems abroad. An aim of this book is to encourage renewed reflection on an old topic-the suitable balance between national and local domains-and one way to assist such an exploration is to view municipal administration from an international perspective: how closely do the central governments of various European countries supervise the affairs of their large cities, and why have the forms of fiscal burden sharing evolved differently? Chapters 5 tries to shed light on these questions.
In conclusion chapter 6 offers a few suggestions for reformers, based in part on lessons that might be drawn from international contrasts.
Excerpted from Tense Commandments by Pietro Nivola Copyright © 2002 by Brookings Institution Press
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.