In the past three decades, most cities outside the Sunbelt have experienced economic contraction, population decline, and increasing concentrations of poverty. For some, like Detroit, the descent has been catastrophic. Dozens of smaller, once vibrant manufacturing and commercial cities like Newark, Cleveland, Buffalo, and St. Louis face similar conditions. Three decades after the wave of urban conflagrations, countless neighborhoods that once housed a productive lower middle class still look as if 1968 happened yesterday. Others, such as New York, Chicago, and Los Angeles, tell tales of two cities—glittering economic resurgence coexisting with deepening deprivation.
The loss of good blue-collar jobs, the flight of the middle class to suburbia, and the urban concentration of minorities and the poor are not a new story. What is relatively new, however, is the political isolation of cities and a related decline in federal and state aid. Public policy once recognized that cities faced a terrible mismatch between local resources and local need. But cities today have more expensive social problems, a stressed local tax base, and less intergovernmental help. "The contraction of aid has been so dramatic that Washington's loss of interest in urban affairs is one of the signal stories of the great transformation to the New Federal Order," says urban scholar Peter Eisinger of the University of Wisconsin's Robert M. La Follette Institute of Public Affairs.
This new reality reflects the conjuncture of several factors. The bipartisan commitment to budget balance, coupled with an aversion to raising taxes, has constrained federal outlay across the board. Within this general climate of fiscal scarcity, the sanctity of Social Security and the bipartisan collusion to avoid cutting defense have imposed disproportionate cuts on the discretionary portion of the budget, which includes urban aid. In this zero-sum game, as a National League of Cities analysis observes, the reduced funds flowing to cities go into a local "shark tank where they will compete directly against each other—the growth in any one program important to cities will only come at the expense of another."
The fiscal isolation of cities also reflects a political deterioration. Many older suburbs, as well as rural small towns, face similar economic and social problems. But where cities were once central to a broader coalition that believed in social remediation through public outlay—whether for rural development or urban antipoverty—cities are now increasingly on their own.
Is there any prospect for reversing these trends, or are cities doomed to go it alone for the foreseeable future? Why have city voices been so muted politically, even among Democrats who rely on urban voters? Can one imagine the revival of a public spending coalition that would unite voters from cities, less affluent suburbs, and needy rural areas? Or is this strategy doomed by the politics of budget balance?
A great urban awakening occurred in the 1960s. Intergovernmental aid, which previously had favored suburbs and rural development, began rising—and flowing increasingly to cities. With the War on Poverty and the Great Society, federal policy sought to compensate for the disparity between urban problems and urban resources. Though Richard Nixon's New Federalism changed the form of the funding to block grants often funneled through states, the stream of federal money continued.
According to the Advisory Commission on Intergovernmental Relations (ACIR), an immensely useful research body crippled by the Reagan administration in the mid-1980s [see Shoot the Mesenger, by Amy D. Burke], in 1957 cities at the center of metro areas got just 19 percent of their total expenditures from intergovernmental aid, compared to 26 percent for suburban and rural communities in the same metro areas. By 1970, intergovernmental aid had increased dramatically to 31 percent for cities and 33 percent for adjacent communities. By the peak in 1977, center cities were depending on federal and state aid for fully 44 percent of their outlays, outpacing nonurban areas, which were getting 41 percent.
State governments also became more conscious of the need to redistribute resources to fiscally stressed cities. Frank Mauro, director of the Fiscal Policy Institute near Albany, recalls the successful 1969 campaign waged by New York City Mayor John Lindsay and five upstate mayors to alter formulas that had biased state education aid against urban areas. The mayors' success in achieving formula changes has been gradually reversed in the last two decades, first by changing the aid criteria in ways detrimental to cities, and then by outright cuts. "What was understood so much better then [in the 1960s] was that there was a mismatch between resources and needs, and that the higher level of government had the broadest tax base," Mauro says.
DEFINING DEVOLUTION DOWN
Since the late 1970s, there has been a sharp reversal. Both the amount of intergovernmental aid and the share going to center cities have declined. Aggregate data comparable to the ACIR's earlier series are not available, since ACIR scaled back its publications during the 1980s before finally being effectively eliminated at the end of fiscal year 1996. But "The Collapse of Urban Aid" (below) suggests the magnitude of the cuts in aid to cities.
The Collapse of Urban Aid
|Federal Funds for Cities, 1981-1993 (in billions of constant 1993 dollars)|
|General Revenue Sharing||8.0||0||-100.0|
|Employment and Training||14.3||4.2||-70.6|
|Clean Water Construction||6.0||2.6||-56.7|
|Source: U.S. Conference of Mayors, The Federal Budget and the Cities (1994).|
According to a study by the U.S. Conference of Mayors, between 1981 and 1993 funding of community development block grants, urban development action grants, general revenue sharing, mass transit aid, employment, and the various programs of the Economic Development Administration fell by a total of 66.3 percent in real dollar terms. During nearly two decades of federal disinvestment, state aid to cities has also declined. Economists Howard Chernick of Hunter College and Andrew Reschovsky of the University of Wisconsin at Madison estimate that state aid to local government, as a portion of local revenues, dropped from 25.4 percent to 21.2 percent of local revenues between 1977 and 1992.
"Devolution," in Republican hands, has not just meant giving lower levels of government greater responsibility, as Nixon's New Federalism did, but a dramatic cut in resources. Richard Nathan, a longtime scholar of federalism, observes that today's proposals stand the original principles of devolution of program responsibility on their head. In a 1996 speech to California legislators, Nathan noted that Nixon's New Federalism was based on "the theory that income transfer programs should be centralized, and other programs should be converted into block grants."
Nixon's proposed family assistance program would have had the federal government take over welfare. In health care, Nixon proposed requiring employers to provide insurance to their employees. Even Ronald Reagan's proposals partly reflected similar principles. Reagan's proposed "swap" would have had the federal government take over Medicaid and the states take over Aid to Families with Dependent Children. Thus, Republicans as well as Democrats once recognized that a state or local tax base was insufficient to provide necessary social supports to its citizenry, and that only the federal government was large enough to raise and redistribute adequate resources.
FALLING AID, RISING NEED
If these cuts in aid to cities had occurred against a backdrop of broadly rising prosperity, they would be less painful. But in the past two decades, poverty has become more concentrated and more urban. The Annie E. Casey Foundation's recent report, "City Kids Count," assessed how children were faring in the nation's 50 largest cities. Using ten key indicators, ranging from low birth weight to school dropout rates and unemployment figures, the report found: "For every measure the average value for the 50 cities shows that kids living in large cities are more likely to be worse off than kids in the nation as a whole," and that poverty rates for children in cities are increasing disproportionately.
"Between 1969 and 1989, the child poverty rate in the 50 largest cities increased from 18 to 27 percent, while the national child poverty rate grew from 15 to 18 percent," the foundation reported. The percentage of children living in distressed neighborhoods in the 50 largest cities increased between 1970 and 1990 from 3 percent to 17 percent. These averages understate the condition of the most distressed cities. For instance, the percentage of children under age 15 living in Detroit's distressed neighborhoods increased from 3 percent in 1970 to 37 percent in 1980 to 62 percent in 1990. Several cities, including Buffalo, Cleveland, and St. Louis, now have 40 percent or more of children under 15 living in distressed neighborhoods. Twenty years earlier, these percentages were all 10 percent or less.
The decline in federal housing aid illustrates how shifts in federal spending patterns compound urban poverty. Since the 1930s, Washington has invested in housing for the poor, either directly with construction grants or through mortgage interest subsidies, and more recently with vouchers. This policy had bipartisan support, acknowledging that poor households, especially in cities where real estate is costly, simply cannot afford market rentals. Even the Reagan administration approved an average of 80,000 new subsidized housing units annually. Few if any new subsidized housing units are included in the current budget, and Washington is actually shedding subsidized units as old mortgages are paid off and public housing projects are downsized.
These budget figures do not take into account the level of unmet need. The number of affordable housing units—defined as a unit that a low-income household can afford without spending more than 30 percent of its income on rent—is shrinking nationwide, while needs are increasing. Using 1993 Housing and Urban Development (HUD) data, the Center on Budget and Policy Priorities estimates there is currently an affordable housing gap of approximately five million units. Comparable 1970 HUD data showed roughly 700,000 units in excess of low-income need.
There is often an important, interactive relationship between two or more federal programs. For instance, ending "welfare as we know it" will end the ability for some unknown number of low-income individuals to pay their rent—just as subsidized housing is becoming more scarce. As welfare reform bites, voluntary agencies dealing with the homeless report huge increases in the number of homeless people seeking shelter. According to the Flint (Michigan) Journal, one agency, Love, Inc., reported a 44 percent rise in the number of people seeking food or clothing between July 1996 and July 1997 despite a generally improving economy. Since cities house a disproportionate number of welfare recipients, they will experience most of these multiple effects, all of which make cascading claims on city budgets.
LOST POLITICAL CLOUT
Disinvestment trends in the face of growing poverty are not simply the consequence of scarce resources. They reflect a steady loss of power by cities, in both Congress and state legislatures. While suburban population growth is an old story, its political effects are relatively recent—and intensifying. Suburbs have become the battleground for swing voters, often at the expense of policies that benefit cities.
Suburbanites were a majority of presidential voters for the first time in 1992. In that election, Clinton narrowly beat George Bush among suburban voters, 41 to 39, with Perot getting 21 percent. In 1996, President Clinton increased his suburban vote, winning 47 percent to Dole's 42 percent and Perot's 9 percent. Fourteen states, including California and Florida, have populations with suburban majorities. In 1996, Clinton won 13 of the 14, and his wins included suburban districts that had not been won by a Democrat since the 1960s.
This capacity to carry the suburbs may be good partisan news for the Democrats, but it carries an ominous message for cities. The grain of truth in the battle for "suburban soccer moms" lies in the gender breakdown for 1996, and illustrates just how critical women voters have become: While suburban men vote 62 percent Republican to 37 percent Democrat, suburban women, by contrast, voted Democratic, 53 to 47. While women have emerged as a key Democratic bloc, the battle for the swing suburban female vote reinforces the general suburban tilt of presidential politics and the impulse to neglect urban voters.
Congressional Democrats, however, ran behind Clinton. In 1994, when they lost control of the House, Democrats lost suburban voters to Republicans, 43 percent to 57 percent. In 1996, a comeback year for Democrats, Clinton won the suburban vote by five points, but House Democrats lost the suburbs by four points, 48 to 52. Democrats may yet be competitive in the suburbs—but at the expense of policies that address cities.
Until the Republicans took control of Congress in 1994, central city representatives, though declining in number, had one huge advantage. Largely Democrats with safe seats and hence seniority, they controlled a disproportionate number of leadership positions. That advantage, of course, depended on Democratic control of Congress, and was wiped out in 1994. Central city representation fell from 30.5 percent to 10.1 percent of committee and subcommittee chairs, while suburban representatives increased their leadership positions from 45.7 to 69.7 percent.
Politically, cities are trapped in a vicious circle. It is a staple of political science literature that lower-income voters are less likely to vote because they feel less of a sense of efficacy and have less confidence that politics will make a difference. This dynamic has intensified in recent years. The political system has delivered less to cities—and urban voters have reciprocated. So while cities have lost population, they have lost even more voters. Voting turnout has declined generally in recent years, but most sharply among the poor. New York's fifteenth and sixteenth districts, representing Harlem and the South Bronx, had turnouts of 33 and 29 percent in 1996. A few miles away, the third and fourth districts, on suburban Long Island, had turnouts of 58 and 55 percent. According to Curtis Gans, director of the Committee for the Study of the American Electorate, the sharpest decline of all has occurred among voters earning under $15,000, with a 20 percent decline between 1990 and 1994 alone.
Cities are experiencing a parallel loss of clout in state legislatures as well because of similar population shifts. Prior to the Supreme Court decision in Baker v. Carr (1962), which required legislative districts to roughly reflect population size, state legislatures were dominated by rural interests, and cities were vastly underrepresented. While Baker v. Carr forced a more equitable distribution of seats, by the time its effect was felt, suburbs, not cities, were the beneficiaries. In many states, the full political impact was delayed, because longtime control of the legislature gave Democrats critical influence in the reapportionment process. In 1994, Democratic representation in state legislatures was at its lowest level since before Baker v. Carr, and rebounded only slightly in 1996.
Consider Chicago and New York. In 1950, according to Margaret Weir of the Brookings Institution, 69.5 percent of people in the greater Chicago metro area lived in the center city, Chicago. By 1990, that figure had dropped to 31.9. New York City's comparable population share fell from 81.1 percent in 1950 to 63.9 percent in 1990.
"For much of the postwar era," Weir observes, "Chicago was able to exercise power in the state legislature by striking bargains with downstate rural Republicans and Democrats, and the suburbs were generally left out of such deals." While that coalition had been unraveling for awhile, "the final blow was the 1991 redistricting that eliminated the city's advantage in the legislature." After the 1992 elections, the suburbs held the majority of seats in the house, 37 percent, compared to Chicago's 19 percent, and 37 percent in the Senate, compared to Chicago's 15 percent. Suburban representatives immediately exercised their muscle by denying Chicago a major economic development project and by slashing general welfare assistance for the urban poor, 80 percent of whom lived (in 1992) in Chicago.
Likewise, New York City's influence in Albany traditionally relied on the sheer number of city voters. According to Weir, the consequences of New York City's shrinking electorate became evident during Governor Mario Cuomo's tenure. Cuomo "spoke out in favor of the city's interests and occasionally proposed such policies as state takeover of Medicaid and more aid for urban school districts, but . . . was often criticized for not following through in the legislature," which had already become suburbanized. By contrast, Republican Governor George Pataki, Cuomo's successor, was elected "on a wave of support from upstate voters . . . who were deeply antagonistic to state spending, which they believed favored the city at their expense."
Two reporters for the Buffalo News, Sue Schulman and Jerry Zremski, spent months investigating why the upstate cities of Buffalo, Syracuse, Rochester, Niagara Falls, Schenectady, Troy, and Utica were faring so badly. Buffalo typifies the dynamics of urban fiscal and political decline. Buffalo has had massive population loss (46 percent since 1950), accompanied by a loss of federal and state aid. Federal aid dropped from 26 percent of the city's budget in 1980 to 14 percent in 1995. In the same period, state aid dropped from 24 percent to 18 percent. Buffalo is so broke that the city is selling off assets and exploring a merger with Erie County.
Schulman and Zremski concluded that reapportionment, which redrew legislative district lines in accordance with suburban population shifts, compounded Buffalo's loss of political influence. Today, only one state legislator out of ten in the state assembly and senate who represent parts of Buffalo represents exclusively the city; the other legislators who represent part of Buffalo have a majority of suburban voters in their districts, and frequently vote against legislation sought by city officials. The Buffalo News quotes public opinion polls indicating suburbanites believe Buffalo "should take care of its own problems."
In a recent paper, political scientists Harold Wolman of the University of Maryland at Baltimore County and Lisa Marckini of Wayne State University examined changes in central city, suburban, and nonmetropolitan congressional districts between 1964 and 1994. The drop in districts with a majority of central city voters, while evident (18 percent), is not nearly so dramatic as the growth of majority suburban districts (228 percent) and the drop in nonmetropolitan seats (54 percent decline).
Wolman and Marckini explored the relationship between place and liberal attitudes and found a consistent correlation, with representatives from cities the most liberal, from suburbs less so, and from nonmetropolitan areas the least. That finding is not unexpected, but Wolman and Marckini also found that place itself made a difference, independent of party affiliation or other factors: "Something about representing a central city, apart from the actual constituency characteristics of the district and party affiliation, had a discernible impact on voting."
The Search for Allies
There are essentially two available possible strategies for reversing these trends: either the development of new forms of regionalism, which would broaden cities' fiscal and political bases, or the revival of even broader coalition politics. David Rusk, former mayor of Albuquerque, has written a provocative book, Cities without Suburbs, in which he argues that "the real city is the total metropolitan area—city and suburb." He classifies American cities into two categories: elastic and inelastic. Elastic cities either have vacant land to develop within their city limits or can expand by annexing adjacent land. Inelastic cities can do neither. Thus, elastic cities can capture some of the regional growth that occurs beyond their boundaries, while inelastic cities mainly reap the social costs.
Inelastic cities, Rusk reports, have everything from greater concentrations of poverty, more segregation, and greater urban-suburban income gaps, to lower bond ratings. Inelastic cities, unable to grow, do not just not remain static; they "start shrinking," losing their people, tax base, and fiscal capacity. Inelastic cities lacking development land, or amenities to attract or renew a middle class, lose most of their middle class to adjacent suburbs. Thus, the city of Detroit is in near-terminal decline, while surrounding suburbs are healthy and even affluent.
Rusk identified 24 cities as having "passed the point of no return," those with major population loss (20 percent or more), a disproportionate minority population (typically 30 percent or more), and average income levels of less than 70 percent of suburban income levels. These cities simply cannot "escape the grip of ghetto poverty solely by their own efforts." Further, he argues, "no city past the point of no return has ever closed the economic gap with its suburbs by as much as a single percentage point." Yet many of these poorest cities are surrounded by some of the wealthiest suburbs. Therefore, regional economic development is an insufficient strategy to help these cities.
Rusk advocates metropolitan or regional solutions as the key to coping with dwindling growth, diminished fiscal capacity, and growing concentrations of poverty. If cities can annex suburbs, as New York and Boston did around the turn of the last century—or make an equivalent claim on tax base and economic resources—then the fruits of growth can be distributed more evenly. While a few cities, such as Indianapolis, have recently succeeded in annexing suburbs, most suburbs neither wish to be annexed nor to share their tax base in other ways. Commuter taxes and other proposals to allow cities to capture suburban tax bases are mostly political nonstarters. The more that suburbs become politically ascendant, the less chance such proposals have.
Another strategy has been proposed by Myron Orfield, an urban planner and state legislator from Minnesota. Orfield is a leading proponent of metropolitan government, having sponsored and passed legislation that yokes together the fate of center cities and suburbs. Until a decade ago, Orfield writes in his book, Metropolitics: A Regional Agenda for Community and Stability, the Twin Cities were thought to be "immune to urban decline, inner-suburban decay, urban sprawl—and the polarization that has devastated and divided older, larger regions." But, as the 1980s unfolded, all the patterns that describe Chicago, De troit, and Milwaukee developed in Minneapolis-St. Paul. Orfield says education is always a bellwether of a downward spiral. Between 1982 and 1994, the Twin Cities' percentage of children on free or reduced-cost lunch went from 33 percent to 52 percent. School enrollment went from 34 percent to 59 percent minority, and "both central cities lost one-third of their pre-school white children." Crime rates grew, including a 1995 murder rate that was "higher than New York City."
Concluding that there was "no federal urban policy left," Orfield introduced legislation to give greater taxing capacity to a previously created Metropolitan Council. Through an ingenious use of mapping, Orfield showed fellow legislators a geographical distribution of social and economic problems, including the increased concentrations of poverty and racial segregation. He also mapped the geographical distribution of state and federal subsidies. Not surprisingly, the maps revealed that those suburbs with the most wealth and resources received significant government subsidies, while many working- and middle-class suburbs, or "inner-ring" suburbs, shared many of the same needs and social problems of the Twin Cities, but had fewer government resources.
Orfield concluded that a regional tax could produce a substantial increase in resources for affordable housing. Again through the use of mapping techniques, he demonstrated that most of the suburbs that ring the Twin Cities (roughly 80 percent) would be net beneficiaries of such a regional tax; that is, they would receive back more than they contributed to a common pool. Only a handful of the wealthiest suburbs, such as Edina or Eden Prairie, would experience a net loss.
Since 1993, a legislative majority has twice approved Orfield's proposed regional property tax on assessed values over $200,000. The Republican governor, Arne Carlson, vetoed it both times. Whether or not the Orfield-inspired coalition will hold hasn't been tested a third time, and likely won't be until there is a different governor.
National economic studies confirm that the economic health of cities and their suburbs is closely tied together, though casual empiricism displays dynamic suburbs ringing decaying cities. What is important is that Orfield proposes a commonality based on self-interest, not altruism. Politically, a coalition of the central city with inner-ring or less affluent suburbs is the polar opposite of the more typical dynamic where a few central city representatives fight suburban legislators over scarce resources. An Orfield-style coalition broadens the urban base to include needed suburban allies. Orfield is convinced that the potential for new political coalitions is not limited to the peculiarities of the Twin Cities or the progressivism of Minnesota, and is helping to advise Cleveland, Chicago, Philadelphia, and Portland, Oregon. In fact, Orfield says every organizer needs to have the following slogan taped to his or her desk: "It's the older suburbs, stupid."
Some elements of Orfield's overall argument are controversial, especially his contention that inner-city poverty is more pathological because it is so concentrated. And some of his remedies face more political opposition than his proposal for a regional tax. Orfield supports transportation and housing policies that literally move people from the inner city to the suburbs where jobs are going begging. Such plans require dispersing low-income housing throughout the region—just the kind of proposal that draws objections from both sides of the racial divide. Racial and ethnic populations often view with suspicion efforts to break up culturally cohesive neighborhoods, even if poverty-stricken; in some cases, dispersal threatens minority political power. Conversely, white suburbanites remain hostile to an influx of racial minorities.
While states could authorize cities to diversify their tax base, they seldom have granted this authority. Wealthy potential taxpayers can usually find friends in the legislature. In one stunning case, a state legislature withdrew its authorization for a city to tax itself in order to provide for low-income housing, even though state coffers weren't out a penny. Washington state legislators passed legislation that enabled Seattle to impose a real estate tax on property transactions. It was short-lived because realtors and developers, who hate this tax, complained to their legislative friends. City representatives, shy of allies, watched as the state revoked its permission.
NEW POLITICAL COALITIONS
American history suggests the basis of a broader coalition politics. For all the difference between urban progressives and rural populists, the basis of their alliance was economic. They expressed a common antagonism against "the interests," who ranged from railroad owners, bankers, and grain dealers to timber and mining corporations. Party alliances, in turn, were backed by the institutional strength of both urban labor and rural farmer's unions, the fullest expression of which is Minnesota's Democratic Farmer-Labor Party (DFL). Throughout the West and Midwest, this alliance produced both progressive Republicans and liberal Democrats, such as Republican George Norris of Nebraska, and Democrats Warren Magnuson of Washington, George McGovern of South Dakota, and Frank Church of Idaho.
Even today, North Dakota's Byron Dorgan, Iowa's Tom Harkin, and Minnesota's Paul Wellstone are beneficiaries of this (albeit now considerably weakened) tradition. What's missing today is the mass organizational base that sent such representatives to Washington (and to state capitals). The rural social underpinning of this political alliance is substantially gone, with the demise of small farmers as a major political force, the weakening of unions, and the reduction of federal outlay as a source of economic development. In its place, Samantha Sanchez, who tracks money in Western states, sees a rise of rural conservative populism ("black helicopter types") often allied with corporate interests such as the "wise use movement" financed by extractive industries to counter environmentalists [see Samantha Sanchez, "How the West Is Won: Astroturf Lobbying and the 'Wise Use' Movement," TAP, March-April 1996].
So long as the political problem is narrowly defined as cities versus the suburbs, little progress toward rebuilding political coalitions can be made. But the persistence of rural poverty and the growing diversity of suburbs may contain the seeds of new political alliances. A dramatic example of change in suburban demographics is the election of Loretta Sanchez to the House of Representatives from Orange County, one of the most conservative areas in the country. In 1996, she replaced Robert "B-1 Bomber" Dornan, who, as of this writing, is still protesting her narrow victory.
This review of the growing fiscal and political isolation of cities suggests one more political price of the bipartisan obsession with budget balance and tax reduction. It is hard to imagine a new public spending coalition in which cities share, if public spending itself is off the table. The old spending coalition included outlays that were place-specific (urban renewal, public housing, rural electrification, public works, farm supports) as well for the broad citizenry (Social Security, Medicare.) Some of the latter programs, such as Head Start, Medicaid, and food stamps, were targeted to the poor and hence benefited the urban poor. Public spending, as a function of government, had broad legitimacy, and cities were considered legitimate claimants. The shift in political power to the suburbs now inhibits the role of place-specific remedies.
There are obvious limits to public spending. But other advanced democracies spend at least ten percentage points more of their gross domestic product than the United States does, and with it they purchase a more equitable society. To restore a spending coalition that cares about urban problems, cities and their advocates need to move on all fronts—to pursue the regional strategies commended by people like Orfield, to restore links with coalition partners, and to energize a constituent base.
For the most part, progressive organizations have had their base in central cities, which are now politically isolated. With the exception of environmental and good-government groups, few progressive organizations seriously pursue the suburbs. Beyond regional alliances, any renaissance of advocacy on behalf of cities requires a broader national agenda that renews the legitimacy of public outlays.