PARIS – In the sidewalk cafes of Paris, people jam the tables, nursing coffee and kir. If global financial trauma has bludgeoned the French capital, it’s not obvious. But clues are there, if you look closely. Broken ticket machines and escalators in the Metro hint at deferred maintenance. On the pricey rue de Rivoli, a shop window proclaims a liquidation sale.In Athens, 1,300 miles away, economic suffering is blatant. Whole neighborhoods are all but abandoned to squatters and riots. The Greek Orthodox Church is serving 250,000 meals a day to the hungry. Graffiti has spread like fungus.
While headlines focus on national economies, city streets are where the trauma will play out. Buses and subways break down. Potholes deepen. Police and fire service dwindles. Since 2008, the U.S. has lost half a million local government jobs. And for European cities, "the worst is yet to come,"
OECD senior economist Hansjörg Blöchliger told a recent Paris conference of planners, academics and urban experts convened by
Johns Hopkins University’s International Urban Fellows Program. For American cities, municipal budgets will suffer until at least 2015, University of Wisconsin professor Andrew Reschovsky told the group.
Why so gloomy? The answer involves tax policy. How taxes are structured, and who has the power to levy them, profoundly influences city and metro region growth and stability