What Cleveland Can Teach Pittsburgh About Coping with City Fiscal Crisis

Pittsburgh's City Hall is on the brink of disaster--a situation similar to that faced by the City of Cleveland in 1978. Financial problems are common among local government nationwide, following the rough economic waters everyone has had to tread in the past 3 years. Pittsburgh has had to take some drastic steps to stem the tide in recent months. Some ask whether "hitting bottom" can be a good thing for getting community leaders to deal with the root causes of these problems.

Cleveland can confidently say "been there, done that" when it comes to dealing with fiscal default and other serious financial problems. A recent news tory in the Pittsburgh Post-Gazette makes this exact point.

In Cleveland, for example, a debate still rages about a 1978 fiscal crisis that forced the city to default on $15.5 million in loans, thus becoming the first U.S. city to renege on its obligations since the Depression.

In the wake of the crisis, which received national attention, the city's business leaders promoted George Voinovich -- who's now a U.S. senator -- as a replacement for then-Cleveland Mayor Dennis Kucinich -- who's now in the U.S. House -- and they spurred action on a number of development projects meant to turn the city around while improving its image nationally.

Bill Bryant, president of the Greater Cleveland Growth Association, said at the time: "There is nothing like a hanging to clear a person's mind." Asked about that comment now, Bryant stuck to it.

"It did clear a lot of minds," he said. He listed the new roads, stadiums and Rock 'n' Roll Hall of Fame that resulted from the crisis's aftermath, not to mention an image makeover that inspired a nickname: "The Comeback City." The city that used to be the "brunt of bad jokes" became a city to study and learn from, he said, hailed in national newspaper articles for crawling out of its hole and rebuilding its Downtown.

"The crisis urged that on," he said. "It more than nudged it on; it grabbed it by the seat of the pants and made it a reality."

Having worked at the Growth Association during those turbulent years, I can say firsthand that the crisis was the just the "kick in the pants" that Cleveland needed. My comment about this situation is that "pain too is a teacher, and we learned a lot from the community's pain at that time."

Is Cleveland out of the woods today? Far from it in my estimation. Many city governments are teetering as I look at the numbers from the Government Finance Officers Association (GFOA) and other groups. From what I can tell, there are no long-term fixes for the fiscal and economic problems facing America's cities. We have to work at managing these issues all the time. There is never a day when we can relax and not do something that deals with our fiscal and economic health. in other words, don't expect miracles and end the search for silver bullets--there simply are none to be found. Closer monitoring of financial conditions, coupled with stronger economic devleopment initiatives that bring in new tax revenues, are needed to help our cities stay a steady course in the future.

Read more here.