New Castle News

July 25, 2013

Our Opinion: There is a broader message in the plight of Detroit

By Staff
New Castle News

NEW CASTLE — The decision to place the city of Detroit into bankruptcy is prompting considerable reaction around the country.

And there are many reasons it should. The conditions the Motor City has endured are hardly unique. Cities of various sizes need to pay attention — as do residents and employees.

Look around and you will find plenty of finger-pointing regarding Detroit’s plight. The loudest of this tends to involve those on the political extremes — a common occurrence on virtually every topic in modern American politics.

On the right you will hear complaints about addiction to big government, reckless spending and union excesses. On the left there is grousing about corporate betrayal and the unwillingness of state and federal governments to intervene effectively.

The truth regarding Detroit is a much more nuanced saga. And it’s one that has been in the works for decades. In many ways, it’s akin to what has been seen in New Castle and other communities in western Pennsylvania, albeit on a far larger scale.

There was a time, of course, when things were going great guns for Detroit. It was the capital of the American automobile industry when this country absolutely dominated the market. Such a situation creates opportunity for a city. But it also creates a dependency on that sizable amount of steady revenue that can be obtained by taxing corporations rather than people.

It’s a situation that works well — so long as those corporations remain healthy and continue to operate. But as we all know, the American automobile industry is no longer what it was.

Plus, modernization has altered the size of the automobile industry’s work force. Long story short, the city of Detroit has lost both substantial revenue and population as the result of changes in the auto industry. And the evolution of suburban sprawl that has occurred across the country has contributed to Detroit’s woes.

Most of this is not the fault of Detroit municipal officials. But the failure to adjust to changing conditions over time is. Biting the bullet and making cuts is tough in government, because most constituencies push for more spending.

But an inability and unwillingness to adapt creates fiscal problems for municipalities that are facing economic challenges. Certainly New Castle is an example of that, as it now operates as a distressed city under Pennsylvania’s Act 47. The situation here is by no means as dire as Detroit’s, but there are similarities.

And that’s why Detroit serves as a warning. Those who ignore reality inevitably suffer the consequences. Municipal retirees in Detroit now face an uncertain future as a result. Cost-effective government that operates on a credible budget is in everyone’s interest.