Cities in Crisis

Abstract

As one manifestation of the current municipal financial crisis, city budget meetings and their coverage in the local news must be mind-numbing to outside observers. Financial stories suddenly shift from budget deficits to just-in-time resolutions followed by announcements of a budget surplus. The reporting explains nothing and only compounds the confusion, making it impossible to distinguish uneventful patterns from those that foreshadow true financial collapse. Most of those inside local government are likewise bewildered. How does city management convince labor union representatives that employee compensation should be restrained when, year after year, the city somehow manages to balance its budget? How does a city manager motivate a department head to reduce the scope of activity in her department when somehow the finance director finds a way to resolve budget shortfalls even while accommodating new city programs? Why would the city reject any new program? Sadly, city officials are as confused as everyone else. And they are not asking the questions that would bring them closer to a productive solution. These officials and everyone with an interest in local government need a framework that will enable them to ask the right questions and administer effective solutions.