Is Philadelphia on its way to being another Detroit?
If you are a sports fan — or just a follower of such woe-begotten teams as the New York Mets, New Jersey Devils and my Washington Redskins — you would think Philadelphia residents would have plenty to celebrate. After all, the city’s sports clubs are on a winning streak unseen since the late 1970s, when Mike Schmidt, Bobby Clarke, and Ron Jaworski were scoring their ways into the hall of fames of their respective teams.
But for residents of the City of Brotherly Love, the news of lopsided victories and championship contentions are mere distractions from the headlines of murder, corruption, and fiscal malaise on the front pages. And Mayor Michael Nutter, who was elected three years ago on a platform of cutting crime, reforming government, and keeping the city on a fiscal even keel, isn’t making any headway on any of these problems.
The bludgeoning of Nutter’s own neighbor, Robert Lancaster, in his home earlier this month, and reports of a possible serial killer strangling three women (one of whom survived) were reminders that that Cheesesteak city’s streets remain as bloody as ever. Although Nutter’s efforts — including a two-year-long effort to confiscate illegal guns through a controversial “stop-and-frisk” effort — have reduced some crime, the city’s homicide rate of 23 per 100,000 in 2008 (the latest year available) is still the highest among the nation’s 10 largest cities; for six years running, it also has had the highest violent crime rate among the nation’s big cities. Philly is just one of two top 10 cities (Houston being the other) that has seen its homicide rate increase between 1999 and 2008.
The city’s spate of corruption became more apparent last month when the Philadelphia Inquirer revealed that the city’s public housing agency diverted $300,000 in fees collected from Section 8 landlords ostensibly intended for training into a lobbying fund.
The agency’s executive director, Carl Greene, was fired a month earlier over allegations of sexual harassment. The city’s police department has also been rocked by corruption, including the arrest earlier this month of a police inspector, Daniel Castro, by the FBI for alleged bribery and extortion related to a $90,000 real estate investment.
As for the city’s fiscal condition? It’s in tatters. The other week, Moody’s cut the city’s bond rating from A1 to A2 because the city must make long-delayed contributions to its defined-benefit pension fund. The downgrade comes as the city plans to issue $268 million in new general obligation bonds. As for the pension? Its $3.5 billion in assets only covers 45 percent of the annuity payments it must make to retiring civil servants, according to Joshua Rauh of Northwestern University and University of Rochester economist Robert Novy-Marx in a study released last month; under Rauh and Novy-Marx’s scenario, the pension may go bust in the next five years.
Meanwhile Nutter isn’t winning any battles anywhere. His decision to enact a 10 percent property tax increase (among the many tax hikes he has pushed through during his tenure) hasn’t done him any favors. He has managed to revamp some of the city’s operations — but without much help from the corrupt city council, with whom he is sparring. He is also fighting with his scandals-plagued predecessor, John Street, who maintains a strong (and inexplicable) influence on local politics. In September, Street stepped up his attacks on Nutter (and his penchant for race-baiting) by declaring that Nutter was merely “a mayor with dark skin.”
But Nutter’s problems — and the sparring among Philadelphia’s politicians — are just endemic of a sclerosis that has made it difficult for the city to revive itself in the way New York City has done in the past three decades. Certainly Philadelphia isn’t the only city struggling to deal with its fiscal, governance, and quality of life issues. It isn’t even Detroit, the poster child for systemic urban failure. But at one point, Detroit was in the same position as Philadelphia before its slide into abject decay. Unless it learns from Detroit’s failures and from the successful revivals of cities such as New York, Philly will become Motown with a Liberty Bell.
Philly’s reputation as one of the nation’s grittiest urban centers has long-belied its nickname. After all, this is the home of the nefarious Black Mafia — whose Nation of Islam-sponsored sprees of graft and murder reached as far as D.C. — notorious police chief-turned-mayor Frank Rizzo (whose law enforcement tactics could be just as vicious) and infamous fans of the NFL’s Eagles, who earned infamy for pelting Santa Claus with snowballs — and have embraced controversial quarterback Michael Vick with equal glee.
The presence of Fortune 500 companies such as cable giant Comcast, insurer Cigna and pharmaceutical GlaxoSmithKline has helped Philly stave off the kind of urban decline that has turned its sister city, Pittsburgh, into a shell of its former glory. So has Philly’s longstanding grip on power over Pennsylvania’s state government, which has helped the city get state funding for some of the city fathers’ pet projects; for the past eight years, it could count on help from the statehouse in the form of Ed Rendell, a former Philadelphia mayor.
But in the past two decades Philly has gone from simply maintaining to a slow slide. It began with Rendell, whose reputation for running a squeaky-clean administration belied growing fiscal incompetence. While Rendell managed to bring down crime, he engaged in such misadventures as pouring $70 million in taxpayer money into a proposed urban theme park that was supposed to be operated by entertainment giant Walt Disney. The site remains a parking lot.
He also helped usher in the city’s deferred retirement option program, or DROP, a pension curiosity in which a government employee forgoes raises and incremental pension contributions in his final years of employment in exchange for a lump-sum payment upon retirement. Although the move was supposed to help the city reduce its pension burden, the DROP plan has actually added $258 million (and even more thanks to a loophole that allows city workers to double-dip, i.e. come back to work on the city payroll after having retired). Among the big-check collectors: Members of Philly’s city council including council president Anna Verna, who can pick up a lump-sum payment of $580,000. This explains why Nutter hasn’t succeeded in getting the council to roll back the annuity plan.
A pension bailout by the state, technically still on the table, is unlikely to happen, while Republican statehouse victories — including capture of the governorship after eight years of Democrat control and the state’s lower house — all but ensures that there won’t be any help coming soon. Meanwhile Philly’s crime problem isn’t getting much relief from district attorney Seth Williams, who teamed up with local judges to drop charges against 19,400 fugitives — including alleged rapists and robbers.
Other long-term problems continue to mar Philly’s future. The city’s public school system, which have been as much an exemplar of systemic academic failure as better-known failure mills as Detroit and Cleveland. Since a takeover of the district by the state in 2001, the district has gone through an array of overhauls, including the hand-off school operations to outfits such as Edison Schools, and even the hard work of reformers such as Paul Vallas (who began Chicago’s successful school reform effort).
But the district still remains one giant dropout factory; just 60 percent of the city’s Class of 2009 made it from middle school to senior year of high school, versus 74 percent of students from the graduating class eight years ago. The superintendent, Arlene Ackerman (a well-traveled school official whose previous stints in D.C. and San Francisco ended acrimoniously) hasn’t won over residents, teachers’ union bosses or even some school reformers. Ackerman gained even more enmity in June when she blocked information on administrative salaries after it was revealed that she took a four percent raise even as the district faces a perilous fiscal future.
Nutter and other city fathers will need to take to heart the lessons learned by officials in the Big Apple and other cities that have seen revivals — including a focus on improving quality of life and addressing crime with more than stop and frisk tactics. Until then, Philly residents will have to move out or stick to reading about the latest Flyers game while chomping down on Geno’s (or, if one prefers, a Pat’s cheesesteak, wit-out).
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