The number of jobs, instead of reaching the one million mark that the planners had predicted, had plummeted to about 750,000. Nearly 19 percent of those jobs came at taxpayers’ expense, through the federal government, the state government, the local government, and the school district. In 1960, there had been roughly 300,000 manufacturing jobs in the city. By 1990, that figure had dropped to 85,000, and all these employment figures reflected the enormous shift in jobs from city to suburbs that had taken place over the past thirty years.
In 1959, 59 percent of the region’s jobs had been within the city limits. By 1990, only 32 percent of the region’s jobs were in the city. And this wasn’t a trend unique to Philadelphia but was similar in virtually every major city in the country. In 1960, per capita income had been 5 percent greater in metropolitan-area cities than in their suburbs. In 1987, per capita income in central cities was 41 percent less than that of their surrounding suburbs. The revolution had come, the determined American march from city street to cul-de-sac was virtually complete, and by the 1990s people such as Ray Flynn of Boston and David Dinkins of New York and Tom Bradley of Los Angeles and Michael White of Cleveland and Ed Rendell of Philadelphia and Richard Daley of Chicago were left holding the broken pieces of what was left.
Out beyond the central business district, in the endless miles of built-up neighborhoods that some of us call the “grey areas,” the rot goes on unchecked.
These words, uttered in 1959 by a Harvard professor named Raymond Vernon and reprinted in a Senate subcommittee publication, had been left to languish on the shelf of the urban studies section at the college library. Thirty years later they formed the urban motto.
III
In 1992, the City of Firsts needed an emergency jump start, something to restore credibility, any credibility, in government. Rendell had a narrow window of opportunity, and he needed to seize on something that offered the possibility of real change. However horrifying the Number was, the budget offered that opportunity. He could gain mightily from fixing it, but he had to do it in a way that was real. Creative budgeting, perhaps the most powerful and useful invention of modern politics, would not do philosophically or practically.
In May 1990, his predecessor, Mayor Goode, had introduced a budget so far-fetched and full of holes that the city controller responded to it by stating, “It may only be balanced for about seven hours.” A month later, when Moody’s Investors Service dropped the city below the level recommended for investors because of numerous uncertainties over the budget, Philadelphia became the only major city in the country to achieve junk-bond status. “Wilson will occasionally tell me I don’t know how bad it is,” Rendell had said privately of Mayor Goode several weeks before his own elevation to mayor. “What I think Wilson really means is ‘Eddie doesn’t know how badly I fucked it up.’ It’s like bailing out a boat. When you’re three quarters done, are you going to find out there are two other leaks?”
Shortly after winning, that’s exactly what Rendell did find—leaks, so many of them that it was hard to believe the boat had ever floated. Within weeks of his victory, City and State magazine came out with its annual survey on the fiscal soundness of the nation’s fifty largest cities. Smack at the bottom was Philadelphia, and those who made a living studying municipal finance only rattled the death knell even more. The situation facing Rendell, said Rutgers University political scientist Ross Baker, is “one of the most hair-raising municipal horror stories in the country.”
It didn’t help that three of the city’s budget analysts did not have computers powerful enough to analyze financial records. Or that city sanitation crews, because they lacked two-way radios in their trucks, could not get in touch with their supervisors when they had a breakdown and so used an emergency notification system that consisted of quarters fed into a pay phone. Or that payroll clerks filled out employees’ daily time reports by hand. Or that marriage licenses languished in boxes and took months to file properly. Or that half a million dollars’ worth of prison uniforms sat in a basement because someone supposedly did not like them. Or that the police department couldn’t hire sketch artists but instead under union rules had to give police officers art lessons. Or that the Department of Human Services paid a provider nearly $115 a day for a camp program that, as Rendell put it, was roughly the same as a discounted rate per night at the Four Seasons Hotel.
Beyond the man-made problems, the city’s financial crisis was further heightened by the areas in which the bulk of the money was being spent. In justifying their handling of the budget, Goode and others had argued that the city’s financial position was not a reflection of bad management but a reflection of an unprecedented and frightening social upheaval that was taking place in America’s cities. Costs of traditional municipal services had been held in check, but costs in four specific areas—health, prisons, courts, and child welfare—had gone up exponentially. The state of Pennsylvania did not assume the major burden of costs in these areas, and there would not be much help from the federal government. The amount of federal funding to the city was half what it had been ten years before when adjusted for inflation, and the number of federally funded city workers, nearly forty-five hundred at its peak, had dwindled to zero. If the federal government would not help to the degree that was necessary and the state would not help, should the city simply follow suit and turn off the spigot?
Rendell discovered that the immediate budget deficit wasn’t $150 million but was closer to $250 million He found out about the weekly cash meeting, at which the city, like a mom-and-pop grocery store staving off bankruptcy, went through a list of bills and figured out who had to be paid (the electrical contractor rewiring city office space was going to walk if he didn’t get something) and who could be stiffed for another month or two (already $7 million in the hole to Catholic Charities, what was another $500,000?). In a macabre briefing with reporters, the outgoing city finance director predicted that when Rendell took office in January, the city would have only $36 million of its $2 billion budget left in the treasury, good for roughly a week and a half of routine spending. After that, there wouldn’t be money for anything, not the salary of a city sanitation worker or the cost of cleaning up after a sudden snowstorm. On the eve of the inauguration, right around Christmastime, the city had $104 million in unpaid bills.
Merry Christmas, Ed Rendell.
Presumably, on paper at least, there was a way for the city to raise revenues sufficient to meet the needs of the budget: it could increase city taxes. Like a bolt of drugs to an addict, it would ease the pain and cause a momentary sense of relief. But once the rush was over, the need would be even worse than it had been before. In a decade of imposing such tax increases, the city’s tax base had dropped $2 billion. Another tax increase, large or small, would hasten the exodus beyond all hope.
But as Rendell and Cohen and White and city budget analyst Mike Masch got over the initial terror of the Number, something strange happened. They were seized by a sense of opportunity that was both breathtaking and unprecedented, perhaps a little bit crazy. It fell largely in the area of personnel and in the amount of money the city paid its unionized workforce each year, not simply in salaries but in health benefits and paid holidays and disability and legal-fund contributions and funeral leave and a host of other items that the unions had negotiated over the years as a legal kickback for labor peace. What that meant was challenging the city’s unions in a way in which they had never been challenged before. It also became clear that savings could be achieved by reining in city departments that seemed to find contrary to their purpose such budgetary practices as monitoring where the money went each month and actually meeting financial projections.
But the option of a bitter confrontation with the city unions wasn’t an easy one, particularly in a town such as Philadelphia, where the cause of workers’ rights had been fought with tears and even blood for nearly 150 years, stemming from a time when immigrants were paid sixty-three cents an hour for a fourteen-hour, six-da
y work week, with July Fourth as their only holiday. White knew intimately about the role of the unions in the city. Every day he was reminded of it by the picture in his office of a handsome and strong-jawed man who had helped lead a legendary strike against General Electric and Westinghouse in 1946 on behalf of the United Electrical Radio and Machine Workers of America. The strike went on for nearly a month and a half, and when union workers defied a court injunction limiting pickets, the police rode on horseback into the crowd of strikers to break up the blockade. The next day the pickets came back with bags of marbles to trip the horses with, and as the police flailed away with billy clubs and chased strikers across lawns, horrified residents opened their homes as sanctuaries. Some ten thousand people crowded around City Hall in a show of sympathy with the strikers, and finally, after fifty-seven days, the strike was settled when workers accepted a raise of $1.48 a day. The man in the picture was John White’s father, Francis, and John was proud of his part in providing the worker with a better life in the city. But he also knew that times had changed. According to historians, the Philadelphia strike of 1946 represented the apotheosis of plant unionism in the United States. Companies responded by using their political clout to dismantle the power of the unions, and on a far more visceral and damaging level they began to take thousands upon thousands of jobs in the cities and move them to places where they didn’t have to grapple with the unions because, praise the Lord, there were none.
IV
The pivotal mechanism that had been created to deal with the city’s enormous financial problems was a somewhat sad and sexless-sounding document called “City of Philadelphia: Five-Year Financial Plan.” (In private, Rendell at least tried to brighten it up a little bit by calling it “City of Philadelphia: Five-Year Financial Plan—No Way Out.”) Its creation was a requirement of an equally sad and sexless-sounding agency called the Pennsylvania Intergovernmental Cooperation Authority, which had been set up by the state legislature in June 1991, when the city was running a deficit of more than $100 million. Empowered to borrow hundreds of millions of dollars on the city’s behalf, the state agency offered the city a way out of its crippling debt. But given the city’s history of empty promises and phantom revenue streams that never flowed, it was not going to simply hand the money over with instructions to have a good time and try not to spend it all in one place. Accountability wasn’t some catchphrase but was a requirement, and if the state agency didn’t like the five-year plan and thought it was financial junk, it would reject it and the city would go into bankruptcy. It was as simple and as stark as that.
On a Wednesday night in the middle of February, after a series of grueling and painful twenty-hour days, the five-year plan was finished. All the pages, several hundred of them, were neatly laid out in twenty-eight little stacks at a ten-foot table in the conference room of Public Financial Management, each stack representing a different city department or public agency that did business with the city. The plan was so laden with charts and dotted lines that it would reduce the most earnest mind to a state of confusion. Even Cohen’s wife, Rhonda, or Saint Rhonda as she had been dubbed during the campaign because of her blissfully even temperament, could barely muster excitement when her husband brought it home enthusiastically, as if it were the newest Grisham novel. But despite its turgid weight and volume, the five-year plan did carry a manifesto for dramatic and radical and unprecedented change in an American city. “What occurs in the next five years will determine our City’s fate for the next quarter of a century,” said the introduction.
From the conference room of PFM on this otherwise dreary night came the simmering sense of something powerful. Perhaps the very setting—a conference room with blue velvet chairs the size of bumper cars, in which lawyers and financial wizards moved about with the quiet confidence of their professional pedigrees—only skewed the real sight lines. For these men, the city would always work. They would always be in a place where the air was climate controlled. If they didn’t find success here, they would surely find it someplace else. They lived in the city, and they loved the city, but they never had the sickening sensation of feeling trapped within it. And from this room, with a kind of schoolboy breathlessness, flowed a current that hadn’t been felt in the city in years, a feeling that somehow, in some way, something within it could actually be changed.
Near the stroke of midnight, Cohen and White and the others who were there decided to call it quits. Cohen’s red tie was pulled down, and the bleak stubs of a five o’clock shadow spread across his boyish face. His hair was greasy and his face puffy, reflecting the look of a man who hadn’t slept in the past twenty-four hours, which in Cohen’s case wasn’t exactly true. He had actually slept about ten hours—in the past eight days. As he left the building, he had that furrowed look on his face, the look of a man with numbers whirring through his mind, a man searching for anything that might have gone undetected—a number off, a word out of sync, a fact over here that did not line up with a fact over there.
Down the street in the quiet night, a city trash truck went about its business picking up garbage. The grind of machinery supplied comfort, a presence on the otherwise deserted block. It was also hard not to notice the diligence with which they cleared away the debris, even at this late hour. Suddenly, as if jolted by something, David Cohen started talking. “It’s crazy!” he shrieked. “What are they doing out here at eleven-thirty at night!!” It wasn’t their safety he was worried about, or the fact that they might be making too much noise. He knew, as surely as he knew anything, that they were working overtime, and the city was paying them time and a half.
He got into his car and headed south to Lombard Street. Neither his wife nor his children were up when he got home. Given that he had averaged about seventy-five minutes of sleep per night during the past eight days, he had a right to be tired. So he showered and got into bed, but still he wrestled with rest. The unions, the media—all would get copies of the five-year plan later that day, and Rendell himself would go on television to give a live address and present details of the plan to the public. Details, details, so many details, so many chances for screwups—unless he could master all of them.…
Several hours later, in the darkened gauze of the night, a nondescript black sedan with an ugly red interior parked across the street from City Hall. With the light from the streetlamps weakly splashing on the pavement, the man getting out of the car walked briskly and firmly. He opened the door at the northeast corner and then ascended the steps to the second floor. The sound of worn sole against hard floor majestically echoed, but only he was there to hear it. The time was 3:30 A.M.
David Cohen was back at work.
Sitting at the head of a large oval table in the Cabinet Room at 8:15 the next morning, Ed Rendell already looked exhausted. Lack of sleep had reduced his eyes to narrow slits, and his body looked pale and almost bloated, like a raft lost on the ocean. He would spend this day much as he had spent the previous one, pushing and pumping and pimping the five-year plan, trying to convince just about anyone willing to listen that this was an authentic blueprint for attacking the city’s fiscal problems, not some glossy document that beyond the charts and the numbers read like pulp fiction. But he also knew that the measures he was seeking, particularly in a city in which the working person was a conquering hero, were draconian. Among other proposals, the plan called for a union wage freeze and drastic cutbacks in virtually every benefit that had been successfully bargained for over the years.
“Nobody wants to be viewed as a prick or a bad guy,” he told a group of local labor leaders from the city’s Building and Construction Trade Council in the privacy of the Cabinet Room. “Neither do I. I didn’t cause this mess. I’m faced with the responsibility of trying to do something about it.
“There’s a lot of pain,” Rendell conceded. “A lot of people will be yelling at me. I understand that.”
But Pat Gillespie, business manager of the council, wasn’t sure whether Rendell really understoo
d at all. “They don’t trust you,” said Gillespie, a handsome, husky man with a smile like an angel and a mouth like Madonna’s. “It’s not you personally. The city government has lied to them consistently. They’ve had it stuck up their ass.”
But Rendell clung hard to the numbers in the five-year plan, and the more he talked, the more convincing he became, the timbre in his voice not one of theatrical fist pounding but more a kind of common man’s incredulousness at just how rotten the system had become. Although he had been trained as a lawyer, Rendell spoke like a talk-show host—instantaneous warmth, humor, accessibility, and unpredictable volcanic explosions every so often, just to keep viewers glued to the screen.
“There hasn’t been a bad day for these guys in thirty years,” he said of the municipal unions, and he excitedly rattled off the wage increases they had gotten during the past three years despite a crippling recession. “Who do you know who got five, six, and eight in the last three years?! Who do you know?!”
There was no answer. If the city workforce didn’t buy into what he was proposing, the alternative was really quite easy: as much as a sixth of the workforce—four thousand of twenty-four thousand employees—would have to be laid off once the contracts expired four and a half months from now, at the end of June.
“I’ve never been in a union, but when confronted between a wage freeze or no job, it’s a pretty easy choice. Look at fiscal year ninety-two. There will be a two-hundred-sixteen-million-dollar cumulative deficit. If we do nothing [for the next five years], change nothing, freeze wages, put in inflation, we will have a one-point-two-billion-dollar deficit. A one-point-two-billion-dollar deficit, and this city will be destroyed.”
A Prayer for the City Page 8