New Castle News

Closer Look

July 27, 2013

John K. Manna: New Castle, other cities face problems like Detroit

NEW CASTLE — While Detroit may be the largest city to file for bankruptcy protection, its financial problems are not unique.

City officials helped create Detroit’s financial mess over the years, but the exodus of businesses and residents from the city over the last 60 years also contributed. And both, to some extent, are interrelated.

That may be an oversimplification, but that explains the situation in a nutshell.

In signing off on the bankruptcy filing, Michigan Gov. Rick Snyder said, “The fiscal realities confronting Detroit have been ignored for too long. I'm making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future.”

He added, “This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored.”

Daniel Howes, a columnist for The Detroit News, wrote that the bankruptcy filing  culminates “a toxic combination of chronic mismanagement, political dysfunction and corruption piled on top of decades of de-industrialization and population flight that have gutted the city’s tax base and its ability to provide services.”

Sound familiar?

Corruption is too strong of a word to use in the city of New Castle’s case, but all of the other elements existed before the city entered Act 47. They may have not been present on a consistent basis, but they contributed to the city’s financial dilemma.

New Castle, though, is not unique in Pennsylvania. Most of the state’s cities have experienced population flight as well as a loss of industries and manufacturers. The two have gone hand in hand to cause shrinking tax bases, making it difficult for some cities to continue providing essential services.

With so many cities facing the same dilemma — particularly with their mounting pension problems — it’s safe to say that the situation wasn’t caused entirely by the ineptness of local officials.

There is no easy solution, but the state Legislature and governor — any governor — need to seek one. After all, this does have an effect on the state’s economy, which so many legislators say they care about.

 

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