I know I'm supposed to be watching the Trump-Biden debate right now. But, with the publication today of the New York Times' Dana Rubenstein's terrific story on New York City's approaching "Fiscal Abyss," and other similar stories being researched and published by home-town journalists serving other large, densely populated urban centers around the nation, maybe the nation's leaders will wake up to the magnitude of the pandemic's - and the resulting Greater Recession's - fiscal impact on most - if not all - of our nation's big, cities. Here's a fragmentary sampling of that kind of coverage for: Boston, Chicago, Miami, and San Francisco.
Densely populated cities have historically been the economic and cultural dynamos of this and every other nation's economy. The benefits of human proximity in fostering scientific, entrepreneurial and artistic creativity and the resulting economic productivity have been virtual clichés of urban economic analysis for generations. But the population density resulting from close human proximity has also led to the vulnerability of our cities - and their fiscal underpinnings - to event risks like air-wars, terrorist attacks and pandemics.

Now as reported by most major news outlets, the House Democratic leadership has suddenly decided to try to re-start action on a new round of fiscal stimulus with a new proposal, (totaling $2.2 Trillion, down from the HEROES act's $3.4 Trillion) which reportedly includes a not inconsequential $436 Billion component for states and localities according to the Washington Post's coverage by reporter Eric Warner. (It's unclear to me from the stories that I've seen whether the $96Billion reportedly included in this new package for k-12 education and other "child-care" is included in $436 Billion for states and localities or would be in addition to that amount.) Is the House leadership just throwing a PR sop to the the Democratic members of the bi-partisan Problem Solvers Caucus who have proposed their own $1.5Billion fiscal stimulus "framework" (which actually includes more for state and local fiscal relief) with 25 D's and 25 R's in co-sponsorship? Or will they be seriously trying to get something passed in both House of Congress before the election?
In any event, even if something significant does pass and it does include revenue shortfall relief for states and localities, will the enormously greater financial burdens of the densely populated pandemic epicenters be recognized through thoughtful allocation formulas or guidelines? The CARES Act fell far short of the mark in that regard and I fear it's unlikely that whatever eventually emerges from the Congress - if anything ever does - will be left wanting as well.
In the olden days (the '60s thru the '80s), through the good work of entities like the now-extinct Advisory Commission on Intergovernmental Relations (ACIR) and many academic public finance analysts and legal scholars, the term "municipal overburden" was coined and widely used to summarize the fiscal consequences of high concentrations of poverty driving up the costs of providing essential local government services like public education and public health. Allocation formulas for intergovernmental fiscal transfer programs such as state and federal aid to education tried to compensate for that factor, (often as the result of state constitutional law cases concerning equal educational opportunity). Now we are suddenly faced with a whopping big example of municipal overburden and its clear from how CARES act money was allocated to essential service providers like transit agencies, that today's federal decision-makers need a crash-course in "municipal overburden finance."
Comments