When Atlanta hosted the centennial Olympic Games in 1996, then-Mayor Bill Campbell predicted that it would just be another step in the city's progress as one of America's leading boom towns. "It will put us in orbit. Atlanta will never be the same," declared Campbell in the pages of Ebony just before the torch was lit.
Fifteen years later, the torch has burned out in more ways than one. Campbell is now far away from the A-T-L in West Palm Beach, Florida, his career extinguished by a 2006 conviction for tax evasion. Meanwhile the City Too Busy to Hate has become the Metropolis Struggling, falling far from its status as the economic terminus of the American South.
The city's unemployment rate has hovered at double-digit levels for the past two years; the 11.3 percent unemployment rate for this past November (the most-recent available) -- higher than the national average -- is double the rate for the same period four years ago. Nineteen percent of the city's houses now sit vacant and ready for vagrancy and crime, double the percentage 11 years ago. The collapse of the housing and corporate real estate markets has also crushed the city's once-bustling construction sector; the number of homebuilding permits granted in Atlanta alone declined by 86 percent between 2007 and 2009, according to the U.S. Census Bureau.
The economic malaise is nothing compared to the city's woeful fiscal condition. The share of city general fund spending devoted to its lavish public sector pensions -- which allows employees to collect annuities equal to as much as 81 percent of last working salary -- doubled between 2002 and 2008; it now accounts for 12 percent of the city's $559 million budget. The city's current mayor, Kasim Reed, has forced city employees to pay a bigger share of contributions. But he and other city official must still wrangle with a $1.5 billion pension deficit and $1.1 billion in unfunded retiree healthcare costs.
Meanwhile the dysfunctional Atlanta Public Schools has spent the past year embroiled in scandal related to alleged cheating on Georgia's battery of standardized tests. The possible fraud (now being investigated by federal officials), along with infighting among its school board members, has led one school accreditation agency to put the district on probation. The district's superintendent, Beverly Hall, has resigned her position, effective end of this school year; as a result of the scandal, the U.S. Senate has declined to confirm her appointment by President Barack Obama to the U.S. Department of Education's Institute of Education Sciences, the agency that oversees federal research on student achievement.
The problems haven't knocked all of Atlanta's shine. It still has the fourth-greatest concentration of Fortune 500 companies, including the ubiquitous Coca-Cola and Home Depot. As the home to cable networks CNN and TBS, it still arguably has the largest concentration of media and entertainment outside of New York, L.A., and Washington, D.C. And thanks to musicians such as Ludacris and India.Arie, impresarios such as Tyler Perry and Kenneth "Babyface" Edmonds, and the studios of Cartoon Network, Hotlanta remains the nation's third cultural center, often a more-dominant force in shaping music, movies and television than its east coast and west coast rivals.
But its glittering skyline and can-do culture can no longer obscure the decades of urban decay that has grown like kudzu. Nor can it truly call itself the economic center of either in the South or its own metropolitan area. This is a problem that lies more with the city's atrophied and scandal-plagued political leadership than with current economic travails. Whether Reed and a younger generation of city leaders can overcome this decline remains an open question.
SWAGGER AND RESURGENCE mixed with élan and a dollop of Dixie has always been at the heart of Atlanta's mythology. That attitude -- along with its original role as a major railroad hub to Southern and East Coast locales -- partly explains why the city recovered spectacularly from William Tecumseh Sherman's burning of its city center during the Civil War, and how it overcame such lowlights as the infamous race riot of 1906 and the unjust prosecution of businessman Leo Frank (who was falsely accused of murdering a 13-year old employee of his uncle's pencil factory).
The city's go-go culture -- epitomized by nightclubs in Buckhead and meetings at the Greater Atlanta Chamber of Commerce -- remains as vibrant now as it was during the days of Margaret Mitchell and Robert Woodruff. As a result, it has become a haven for college-educated go-getters -- who make up 47 percent of the region's population. For African Americans, Atlanta is a particular cultural and economic mecca. After all, it is home to historically black universities such as Morehouse College; and the birthplace of civil rights leader Martin Luther King; and the hometowns of former mayors Maynard Jackson and Andrew Young, whose successful tenures proved that not every black mayor governs like Marion Barry.
But in neighborhoods such as Bankhead and Center Hill, there's a different kind of moving and shaking: Drug crime and murders that have been a constant feature of life in the poorest sections of the city. Jackson and Young often downplayed the problem, to the city's long-term peril. While the number of reported murders has declined, Atlanta still has the fifth-highest violent crime rate in the nation. Its property crime rate of 6,213 incidents per 100,000 people is higher than that of D.C., Portland, Oregon, Louisville, and Oklahoma City (which have similar sized populations), as well as higher than that of New York City, L.A., Chicago and Houston (its competitors on the national economic and cultural stage).
The city's biggest problem can be seen just by driving along the heavily congested Downtown Connector and equally-clogged I-285 surrounding the city limits, as workers head out of the city into suburbs such as Dunwoody and Stone Mountain. One million people moved into the Atlanta metro area between 2000 and 2008, making it the second most-popular relocation destination after Dallas. But most of those new residents have all but avoided the city limits both in spirit and fact; a resident in tiny Dacula can work, shop, watch movies and go to a concert without ever stopping by the Georgia Dome. This is also true for businesses. Corporate giants such as Rubbermaid, First Data, and UPS are located in nearby Sandy Springs, while Waffle House and NCR are even further outside the city in rival Gwinnett County.
Atlanta's decline as an economic powerhouse can be blamed in part on Campbell, who'd been handpicked by Jackson and Young to become mayor in 1994. During his tenure, he antagonized the business community and some fellow black leaders alike with antics such as handing over the vending and marketing operations for the 1996 Olympics to one of his former campaign operatives, Munson Steed III. His penchant was for steering contracts to pals by using the city's affirmative action contract rules; by 2000, city businesses successfully challenged those race- and gender-based preferences. By the time Campbell left office in 2002 under the cloud of a federal investigation, the city labored under an $82 million budget deficit. Corporate chieftains, tired of Campbell (and decades of race-baiting), decided to focus their energies elsewhere.
His successor, Shirley Franklin, managed to clean up the corruption, closed the deficit, and won over corporate support. But during her tenure, she sweetened pension benefits for city workers that led many of them to choose early retirement; since 2001, 90 percent of the city's police officers and firefighters handed in their retirement papers at age 55 (10 years earlier than their private-sector counterparts); actuaries expected the rate to be half that. The deals, along with $650 million in investment losses, have created an unsustainable burden. By the time Franklin left office in 2009, the city was shouldering $144 million in pension costs, a three-fold increase over the amount spent eight years earlier.
Current Mayor Reed -- a former state senator and protégé of Franklin and Congressman John Lewis who won a close, racially charged campaign -- has at least taken some steps to address the city's escalating pension problems. Last week, a pension reform panel convened by the mayor offered some steps to close the deficits, including enrolling workers in Social Security and requiring future employees to enroll in defined-contribution plans. But the city's public employee unions, already sore over being forced to contribute more to their pensions, are spoiling for a fight; Reed may not get much help down the street from the Republican-controlled legislature. Reed also has to balance efforts at economic development with placating black political and civic leaders who have spent the past two decades complaining about racial and economic gentrification.
Reed also faces an unexpected challenge in the form of Atlanta Public Schools, which was struggling academically even before allegations of cheating emerged last year. Fifty-four percent of the district's eighth-graders tested Below Basic proficiency on the math portion of the 2009 National Assessment of Educational Progress; just 65 percent of the eighth-graders in the original Class of 2009 made it to senior year of high school. With the cheating scandal, the disgrace of being put on probation by the Southern Association of Colleges and Schools, and the increased scrutiny from new Gov. Nathan Deal, Reed could follow the path of mayors such as New York's Michael Bloomberg and take control of the district.
Between the busted pensions, the economic struggles and the dropout factories, Atlanta will need all the resilience it can muster. This time, the blazes are coming from within.