New Report: Rust Belt Cities Need Increased Involvement by State Governments
NEW YORK, NY – For decades, cities in 11 Rust Belt states have faced growing legacy costs -— debt and retirement-benefit liabilities — as poverty rates have increased.
A new report from Manhattan Institute Senior Fellow Stephen Eide examines 96 major poor cities within these states, looking at historical data on employment, population, poverty and government debt. His findings show that Rust Belt cities’ legacy cost burdens will continue to weigh on them just as much as will their legacy of industrial decline. High debt and retirement-benefit liabilities, as well as shrinking tax bases, spring from and perpetuate a lack of private investment.
Eide says it’s doubtful Rust Belt cities can grow their way out of their struggle with legacy costs.
He argues state governments must play a support role in ensuring Rust Belt cities’ abilities to continue providing basic municipal services.
The 11 states Eide examines are: Connecticut, Illinois, Indiana, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Wisconsin.
Eide’s findings include:
• Of the 96 Rust Belt cities surveyed in the report — all of which have a population of at least 60,000 and a poverty rate above their respective state’s average — 72 have less population than their 1900–2010 maximum. Of those that lost population, half saw their populations reach their highest point in the 1950s or 1960s.
• All cities surveyed have seen their poverty rates increase since 1970. All but three have seen their poverty rates increase at a greater rate than that of their state.
• Between 1972 and 2015, the most recent year for which data are available, 71 of the 96 Rust Belt cities surveyed saw their per-capita debt burdens increase in real terms.
• In 46 of the 66 cities surveyed for which data are available, or 70 percent, retirement-benefit liabilities — pensions and retiree health care — were a larger burden than bonded debt in 2015.
Click here to read the full report.
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