All told, it will take about $1.5 billion to deal with the lead poisoning catastrophe in Flint, Michigan, about 3,000 times what it would have cost to employ safeguards that could have prevented the crisis in the first place, Congressman Dan Kildee said last month at the Lincoln Institute’s 2016 Journalists Forum on municipal fiscal health in Washington, D.C.
Speaking to about 50 leading reporters and editors, Kildee described Flint, his hometown, as an extreme case of a downward spiral that could happen in many U.S. cities: economic decline, loss of population, neglect of infrastructure, and drastic cost-cutting measures. “There are a lot of Flint, Michigans in this country – more than I think most of us want to admit,” he said.
Kildee shared the stage with Mayor Mick Cornett of Oklahoma City to kick of the Journalists Forum, a wide-ranging conversation about the structural issues that shape the financial health of cities. Partners included the Pew Charitable Trusts, Omidyar Network, Pulitzer Center on Crisis Reporting, and the Ford Foundation.
It’s easy to forget that many cities that are thriving today, like New York City and Washington, D.C., once teetered on the brink of insolvency. Richard Ravitch of the Volcker Alliance suggested that what makes things more severe today are pensions and other post-employment benefits. Washington’s unique governance structure facilitated a swift response, said John Hill, who managed that city’s fiscal crisis in the 1990s, and is currently Detroit’s chief financial officer. Kevyn Orr, former emergency manager for Detroit, said it was critical to balance financial and humanitarian interests, especially in the depths of a fiscal crisis.
Looking at the revenue portfolio of cities, Lincoln Institute fellow Lourdes Germán described the current state of capital markets, innovations such as value capture, and the integration of financial and spatial planning. New York City Planning Director Carl Weisbrod shared examples of value capture from theVanderbilt Avenue corridor and Hudson Yards, where the city is partly funding public investment with the expected increase in land values. Jerold Kayden of Harvard's Graduate School of Design provided the historical context in which planning and infrastructure investment has occurred in the United States.
Transparency is crucial for cities to access the $3.7 trillion municipal debt markets, said regulators Lynnette Kelly of the Municipal Securities Rulemaking Board, LeeAnn Gaunt of the SEC’s Municipal Securities and Public Pensions Unit and Christina Ho, Deputy Assistant Secretary for Accounting Policy and Financial Transparency at the Treasury Department. The MSRB’s Electronic Municipal Market Access (EMMA) website is a resource for investors, journalists and the public to learn more about municipal borrowers and bonds. Germán introduced the Municipal Fiscal Health Dashboard, a forthcoming Lincoln Institute database that will allow for comparisons of 150 U.S. cities. Greg LeRoy of Good Jobs First noted that more information will be available through new Governmental Accounting Standards Boardrequirements to report the true costs in lost revenue of tax breaks for business location.
Looking at fiscal stress from the state perspective, Kil Huh, Pew’s senior director for State and Local Fiscal Health, said an important function of monitoring was to detect early warning signs of stress, in cities from Stockton, California to Central Falls, Rhode Island. Craig Kinns, assistant operations director for the New York State Comptroller’s Office, reviewed the state’s unique Fiscal Stress Monitoring System covering more than 4,000 local governments and school districts, which shows that nearly a quarter of New York’s cities are fiscally stressed. In terms of state budgets themselves, 41 states have balanced-budget laws, but the public packaging of expenditures, revenues, and debt can be opaque, said Bill Glasgall, director of state and local programs for the Volcker Alliance and an advisor to the Ravitch Fiscal Reporting Program at the City University of New York Graduate School of Journalism. He shared results from the project Beyond the Basics, a survey of state budget practices.
The federal role in the fiscal health of cities has diminished over the years, but remains critical in many ways, whether unfunded mandates or the problem of unspent block grant funds. The Obama administration has been attentive in helping Detroit and more than a dozen other cities through the Strong Cities Strong Communities Initiative, said Don Graves, Deputy Assistant to the President and Counselor to Vice President Joe Biden.
Fiscal stress knows no boundaries, as the international session led by Lincoln Institute president George W. “Mac” McCarthy made clear. Hector Negroni from Fundamental Advisors LP presented on Puerto Rico’s looming debt crisis, calling for a resolution that adheres to the rules under which debt was sold, and preserves the seniority of creditors. The rapidly growing cities of China have racked up staggering amounts of debt, and must find a more sustainable path that may include exploring the use of the property tax, said Zhi Liu, director of the Lincoln Institute’s program in China.
As a prominent feature of the Journalists Forum, now in its 10th year, writers and editors shared their insights and observations in the practice of the craft – and the particular challenges of communicating complex fiscal issues for a broad audience. James Surowiecki, author of the Financial Page column at The New Yorker, kicked off the event at the Reagan Trade Center, noting the many impediments to local fiscal health, from an obsession with the short-term that restricts investment in infrastructure, to the culture of American individualism that shapes attitudes about cities and planning. Tom Ashbrook, host of NPR’s On Point, provided a behind-the-scenes look at managing callers and fostering live discussion.
Liz Farmer of Governing shared Finance 101, the magazine’s ongoing series covering fiscal stress across the nation. Former Wall Street Journal reporter Constance Mitchell Ford, now teaching fiscal journalism at the University of Maryland, noted the wealth of information that is available through credit rating agencies.
In a session devoted to analyzing and packaging complex data, Sarah Cohen from the data team at The New York Times shared efforts to help readers understand statistical analysis, such as the interactive Olympics Musical infographic, and Laz Gamio and Ted Mellnik from The Washington Post walked through the creation of a map of where millennials are moving in Washington. Data visualization developer Ben Chartoff and senior research associate Jon Schwabish of the Urban Institute used the visual metaphor of a pyramid to show the inverse relationship between the depth of research and the size of the audience for various modes of communication, ranging from technical papers to social media posts. Finally, Tom Burgis from The Financial Times showed how data collection and analysis must frequently be accompanied by old-fashioned on-the-ground reporting, as he found in the project The Great Land Rush.
Challenging economic pressures in the media industry make it even more difficult to produce in-depth stories on fiscal issues, so the Forum concluded with a session on foundation-supported journalism, led by Steve Sapienza from the Pulitzer Center on Crisis Reporting. The panel included presentations by Matthew Niederhauser on the project The Megacity Initiative, Claire Provost of The Guardian on the in-depth reporting opportunities provided by her fellowship with the Centre for Investigative Journalism in London, Chris Arsenault at the Thomson Reuters Foundation, Stateline editor Scott Greenberger on covering issues like the opioid crisis, and veteran syndicated columnist Neal Peirce, founder of Citiscope.
The Forum was enhanced by a lively conversation on Twitter with the hashtag #fiscalhealth, and coverage by Reuters, ABC, The American Prospect, Africa Check, CityMetric, and the St. Louis Post-Dispatch.