The mess we’re in 

The city of Rochester's in crisis mode. Again.

            Rochester City School Superintendent Dr. Manuel Rivera announced that the district is facing a $50 million dollar budget gap. One day later, in his State of the City address, Mayor Bill Johnson said the city will have to cut funding to the schools unless it sees an increase in state aid.

            The concentrated poverty in the city's "crescent" neighborhoods --- site of the majority of Rochester's 57 homicides in 2003 --- is threatening to become "a noose around our necks," according to Johnson.

            And most of this, he says, can be traced to higher levels of government.

"We see evidence of what could be called an anti-city, anti-urban bias," Johnson said in an interview late last week. "Now, that's a strong term, and I'm actually trying to find another way of putting it to the state. But they have no current urban policy."

            The carving of legislative districts has left city representatives in Albany --- like State Assemblymembers David Gantt and Susan John --- also responsible for suburbs like Gates and Chili. This "weakens our position," Johnson says. "It forces us to deal from a position of crisis."

            The crisis stems from dollars and cents issues, too. With each passage of the budget, the state waives its requirement to distribute 8 percent of its annual income-tax revenues to municipalities like Rochester. (Every year, the waiver is buried deep within the budget, and is passed as part of the total budget package.)

            In raw numbers, this translates to an additional $140 million Rochester should have received from the state in 2003. Rochester's budget gap for 2004 is$38.1 million.

            "For the [state] legislature, aid to municipalities has not been a priority," says Ed Farrell, executive director of the New York State Conference of Mayors. The NYCOM has been documenting revenue-sharing shortfalls throughout the state for more than a decade. "When you look at revenue sharing, I can't think of any other aid program that's actually getting less dollars than it was a decade ago. We're not even talking about adjusting for inflation."

            And of all state budget lines, revenue sharing has a direct impact on each municipality's bottom line. "Every city in the state, if they were getting their full allocation of state aid, would be able to relax the pressure on their property tax base," Johnson says.

But is there a problem with the clause "every city in the state"? If New York State lived up to its revenue-sharing obligations in 2003, Johnson says, it would have provided almost $3 billion in additional aid to municipalities --- cities, towns, counties, villages. That money has to come from somewhere.

            "Look, this state this year is going to spend over $100 billion [in state and federal funds]," Johnson says. "George Pataki put in a $99.9 billion budget. There's no way the legislature is going to pass that intact. But it's clearly going to be a nine-figure budget for the first time in our history. And when you consider that the state's municipal-aid obligations are only $3.5 billion under that formula, you say to yourself, 'Wait a minute. Of all these things Pataki's scrambling to do here, shouldn't he start with lowering the property tax?' This is one of the first criticisms we face from our business and commercial base: that our taxes make us uncompetitive."

            There's untapped potential for development here, too. "It would actually give us a pot of money that we could be doing things with," Johnson says. "We would have an ability to undertake projects like the Performing Arts Center."

            So what's it going to take to restore municipal aid? Johnson acknowledges the political risk in fighting Albany. "Local governments know that you get punished for taking on the state," he says.

            He also realizes that the state has to answer to the Bush Administration. "The imbalance of both responsibilities and payments among different levels of government begin at the top --- the federal government," he said during his State of the City.

            "[People may think] it's not worth the political risk of doing this," Johnson says. "I think with the success of the Campaign for Fiscal Equity case, maybe this is something that should be considered."

Then there's the "crescent": home to most of the metro area's violent crime, a majority of the region's foreclosures and vacancies, and virtually all of the region's lead-paint-related health problems. Crescent neighborhoods are also the source of much of Rochester's negative publicity, Johnson says.

            He would like the city to follow a "collective advocacy" approach detailed in a recent study by Harvard University. "If you're going to have sustainable revitalization in these tough neighborhoods, it will only come when you've got citizens --- the people who live there --- taking part in the effort," Johnson says. "You can't bring people in. You can't take the missionary approach. It just doesn't sustain itself."

            In his State of the City, Johnson took this a step further by suggesting that without jobs, the poor residents of the crescent will have nothing to invest back into their communities.

            But where are the jobs going to come from? And what will they be?

            "This is an extraordinarily complicated subject. And I'm not smart enough to have already worked out the answer," he says. "I just know we need to work it out."

            The national dialogue on the outsourcing of white-collar jobs --- sure to escalate during the presidential campaign --- gives us a place to start, Johnson says.

            "I suspect we're going to see some corrective course that will keep these jobs in the country," he says. "But we need to say: Look, we've got this increasing class of extremely poor, unskilled people. We've got to create more economic opportunities for those young men who, if you talk to them, will try to argue they're nothing but small businessmen. By selling drugs, they're fulfilling a demand in the market. And they're doing pretty darn well. So we've really got to undercut their position simply by creating more legitimate jobs for them."

            "To learn that 77 percent of Monroe County's population once lived in Rochester, and now only 29 percent of the county's population lives in the city --- well, there's got to be something bad that precipitated this," says Johnson. "When people go back to their old neighborhoods, they ask 'What happened? This used to be a wonderful place.' It's because the people left behind can't support this level of development.... We've got to get inside people's heads without fighting them. If public policies and money were used to create the suburbs, why can't we have domestic policies to help restore our cities?"

How it happened

Several aspects of Rochester's steady economic decline can be attributed to forces far beyond the city's control. For example, from its inception in 1934, the Federal Housing Administration encouraged middle-class flight from urban areas through its insured fixed-rate mortgages. Among the forces:

            • The FHA favored the construction of single-family homes on the edges of metropolitan areas.

            • The FHA made it easier for families to buy new homes than to rehab old homes. FHA loans for the repair of existing structures were small and of short duration.

            • By conducting "unbiased professional estimates" before making loan guarantees, the FHA "allowed personal and agency bias in favor of all-white subdivisions in the suburbs to affect the kinds of loans it guaranteed."

            • Interstate 490 opened in the 1950s. Federal subsidies provided 90 percent of the construction costs.

            • After receiving no federal subsidies, Rochester's subway system was forced to shut down in 1956.

            • RIT moved out of downtown Rochester and into Henrietta in 1968. Around the same time, Kodak used public subsidies to expand to Gates.

            • Eastview Mall opened in Victor in 1971, hastening the demise of Midtown Plaza and downtown shopping.

            • During the 1980s, federal funds paid for the extension of Route 531 into the western suburbs. Federal and state money was used to complete Interstates 390 and 590, making it no longer necessary for people to drive through the city.

            • From 1994 to 2004, the value of Kodak's property in the city dropped 49 percent.

            Sources: "Crabgrass Frontier," by Kenneth T. Jackson (1985); Mayor Bill Johnson's 2004 State of the City Address.

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