Flint, Michigan, offered a devastating lesson in how state takeover of a city can fail. Agency control—“de-municipalization”—is a better idea.
Having marked 10 years since the end of the great recession, municipal insolvency has receded as a leading focus of urban policymakers. Nonetheless, the same structural weaknesses that led to a surge in municipal bankruptcies continue to persist. In the Rust Belt and elsewhere, municipal services remain caught between an impoverished tax base and burdensome legacy costs relating to debt and retirement benefits.
In the coming years, we’re going to need to rethink the relationship between state and local governments if we want to reckon honestly with the challenge of municipal distress. States will need to take a more forthright role to guarantee basic service quality for residents of chronically poor cities. In a new report for the Manhattan Institute, I explore an idea I call “de-municipalization.” Instead of taking over an entire city on an emergency basis, states, or sometimes counties, should assume control of a major city department, and on a presumptively permanent basis.
Stephen Eide is a senior fellow at the Manhattan Institute and author of the new report, De-Municipalization: How Counties and States Can Administer Public Services in Distressed Cities.
Photo by ehrlif/iStock