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 sidebar, page 56], 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. …