This Works: Managing City Finances

A revolution in municipal management was at the heart of the urban renaissance of the 1990’s. Across
the nation, mayors of all ideologies and parties found more efficient ways to run city governments, and they used the savings to cut tax rates, rebuild decaying infrastructure, and modernize antiquated government information systems.

However, despite the successes to date, cities cannot afford to rest on their laurels. Many continue to face losses of population, jobs and wealth as the information economy gives workers and businesses more freedom to choose where to live and work. Cities are also facing a crisis of rising expectations. As taxpayers become more and more accustomed to obtaining 24/7, personalized attention from companies like Amazon.com, they expect the same from City Hall. This means city governments will have be faster, smarter and more flexible.

In order to continue to flourish, urban America will require additional reforms in the way it is governed. These reforms are embedded within the following six strategies:

• Injecting competition into city services;
• Making government performance-based;
• Modernizing government through information technology;
• Improving asset and financial management;
• Enhancing human capital by transforming the nature of public work and public personnel; and
• Creating institutions to drive continuous improvement.

By implementing reforms based on these six basic concepts, all reinforcing one another, America’s cities can make the successes experienced in the 1990s the norm, rather than the exception, of urban governance.

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William D. Eggers is a Senior Fellow at the Manhattan Institute. Stephen Goldsmith, the former Mayor of Indianapolis, is Chairman of the Center for Civic Innovation and Senior Vice-President for e-Government and Strategic Development at Affiliated Computer Services State and Local Solutions.