Confronting Local Fiscal Crisis: Moving Toward Sustainability
With support from the MacArthur Foundation, a team from George Mason University’s Center on State and Local Leadership, led by Frank Shafroth, is in the midst of a multi-year study analyzing the fiscal challenges in the wake of the Great Recession. While considerable effort has been devoted to understanding macroeconomic trends, far less attention has been giving to understanding the recession’s impact at the municipal level. This project directly addresses this critical, and under-appreciated, dimension of fiscal crisis.
The study’s goal is twofold. The first objective is analyzing the complex nature of economic policy, outlining the evolving role of local governments in the federalist system. Building from these findings, the team is creating proactive policy prescriptions, aimed at assisting leaders struggling with similar financial challenges. The final report will provide an in-depth discussion of “best practices” and online resources to share with municipal and state leaders.
The project is structured around six struggling cities: Pittsburg, Providence, Detroit, San Bernardino, Chicago, and Baltimore. The case studies incorporated on-site interviews with local leaders, members of the community, and the media to understand the interaction of policy and economic and sociodemographic factors. Each of the selected cities faced financial challenges over the past decade, and their efforts have met with varying degrees of success. Critical to the study’s methodology, the cases fall into two broad categories: cities located in states with or without a formal intervention program. By contrasting states with systematic intervention programs against those without, the project highlights the numerous ways state governments can exacerbate or alleviate crises within their borders.