By David Eichenthal

David Eichenthal: A False Choice

You’ve just been elected Mayor of your city. More than one in ten of your residents are unemployed and more than one in four are living in poverty. At the same time, you face a growing budget gap. Even though your workforce has not received a raise in three years, growing pension and benefit costs are outpacing limited revenue growth. And to top it off, rather than investing funds that would have gone to roads, transit, housing and other capital investments over the last three years, the city has had to use those funds to balance the budget.

Some people will tell you that you have to make a choice – balance your budget or invest in economic growth. They are wrong.

Mayors – and City Managers – of economically struggling cities don’t have the luxury of picking between balanced budgets and essential services and investment. They need to determine a path that allows for both.

Last month, at the Federal Reserve Board of Philadelphia’s Restoring Communities conference, I talked about a series of strategies for cities to balance budgets by doing more with less – focusing on how cities can and have worked to strategically reduce costs without reducing quality of life in their cities (presentation and audio are available). But the main point was that cities that figure out how to do more with less might have the resources to do different things – such as making critical, often neglected, investments in talent and infrastructure. Balancing budgets is an essential first step to a city’s recovery – but cities exist to do more than just produce a balanced budget.

At Columbia Law School, I made the case that effective management and oversight were essential components for the recovery of economically challenged cities (presentation). It is very hard for economically challenged cities to recover without a foundation of sound government.

The National Resource Network will work to deliver assistance to cities that does not force them to make a false choice. By having Consortium members and strategic partners with broad expertise, we can help cities make the right choices when it comes to their economic recovery.