Tom the meek

Part 2

by Michael Crowley

On the surface, the good times are rolling in Boston. Real estate is booming. Businesses are profitable, jobs plentiful. The city is seeing a historic flurry of development. People are optimistic about the future. Gee, it all sounds a lot like . . . 1986.

And remember what followed then: a painful recession. Tax revenues plunged. Frantic budget-cutters on Beacon Hill slashed millions in aid to the city. Crime soared and property values plummeted. As recently as four years ago, people spoke of crisis in the city.

It could easily happen again. Which is why Boston needs strategies that will save money, make the city work better in good times, and help it ride out the bad times if they come.

There's no doubt that the city's budget is ripe for reform. Boston's government is a mess of payroll lard and inefficiency. Although such comparisons are crude, Boston does run much bigger budgets than some famously efficient cities of comparable size. Boston, population 547,000 or so, has a $1.4 billion operating budget. Cleveland, with around 500,000 residents, spent less than $400 million this year. Indianapolis, with some 750,000 people, got by on about $440 million.

Perhaps even more amazing, there's no way of knowing what that money's really paying for. It's been more than 20 years since an independent group thoroughly analyzed the efficiency and cost of the city's services, according to the Boston Municipal Research Bureau, a city-government watchdog group. During his 1993 mayoral race, talk-radio host Christopher Lydon tried to crunch the numbers and concluded that our costs are roughly twice those of comparable cities.

Here's small example of how that is: a June study by the Boston Finance Commission found that, due to poor oversight, contractors were being paid an exorbitant $14,000 per week to clean up city parking lots -- sometimes for work that wasn't even done. Subsequent bidding revealed the job's true cost: $1000 per week. The consequences of this kind of wasteful government are high taxes and a budget that cannot be sustained in lean economic times.

But that's the price of an old model of city government in which machine politics, patronage, and fealty to municipal unions often outweigh efficiency. In Boston, the tradition goes back to the city's Irish immigrants, who used City Hall to secure the power and jobs refused them by the Yankee establishment. The standard was set when the irascible (and ultimately imprisoned) James Michael Curley became mayor in 1914: "The devotion of Curley's followers and his magnetic hold on the voters could be sustained only as long as he delivered the two things these people needed most -- benefits and jobs," wrote the Boston historian Thomas H. O'Connor in The Boston Irish: A Political History.

In the early decades of the 20th century, the story was the same nationwide: mayors aimed to please their supporters with little regard for cost or efficiency. Even though classic machine politics had lost steam by the postwar years, a flood of federal aid -- including billions poured into the cities after the urban riots of the 1960s -- sustained the largesse of city government. Cities could throw money at social problems without worrying about how it was being spent. Waste was easy to overlook and patronage was affordable. All the while, unions grew in power nationwide, boosting municipal employees' wages.

But even with Washington's money, this way of doing things was not sustainable. From New York to Los Angeles to Boston, city taxes soared without bringing apparent benefits. As education, public safety, and city services eroded, the middle-class families on which cities relied for social stability and a tax base fled to safer, cleaner, cheaper suburbs. (In 1960, 37 percent of Americans lived in cities; now about 25 percent do.) Businesses followed right behind.

Cities in the 1990s face new perils. Federal aid has dropped sharply as a result of budget cuts and a political consensus that massive urban spending programs don't work. At the same time, Washington has shifted new and daunting responsibilities to the local level; last year's welfare reform, for instance, dumped support of the poor onto the states.

Today, about 80 percent of the city's revenue comes from state aid and property taxes. But state aid is increasingly earmarked for specific purposes, like education reform. And because Proposition 2¹/₂ caps property-tax increases, they can't be relied on to stop a budget crisis.

In a 1993 assessment of the city's financial future, the Boston Municipal Research Bureau, a city-government watchdog group, warned: "The inherent limitations of Boston's revenue structure are not sufficient to maintain the growth of expenditures facing the city in the foreseeable future. Boston is at a crossroad. Its problems are manageable, but fundamental change is required now." That change has yet to come.

"As federal aid has gone down, some cities have been able to avoid innovation and change because the economy has been so good," says Skip Stitt, the deputy mayor of Indianapolis, perhaps the leading reform city. "Some poorly managed cities have gotten away with that. But we'll see many, many cities very crunched."

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Michael Crowley can be reached at mcrowley[a]phx.com.