Predictably, Marion Barry, the city’s mayor, calls such assessments ““outrageous.’’ But there is no doubt Washington’s local government has finally, truly collapsed. The General Accounting Office recently declared it insolvent, and recently, Barry asked for hundreds of millions more in federal aid to help cover an expected $722 million budget deficit. Instead of dismissing the international, Third World parallel out of hand, Barry and other Washington leaders might find it useful to think about the city that way – both to understand the colossal mess and to plot a way out. ““Cities all over the world,’’ says the World Bank’s Michael Cohen, ““are converging in their most important characteristics – like unemployment and fiscal crises – even if the causes of those crises differ from place to place.''
How did the District get itself into such a state? For one thing, Washington resembles a former colony more than a major metropolitan power. Because it was essentially run by the federal government until the 1970s, Washington, unlike other American cities, never developed a local political tradition or a class of civic-minded business leaders. The old colonialists still wield power. Though the city is expected to run itself, its taxing power is limited, and much of the land, owned by the federal government, is tax-exempt.
Most important, the District has no basic industry other than the federal government. So the city’s approach to unemployment was the same one traditionally used by many political leaders in the developing world: put the jobless on the city government payroll. Washington has about twice as many municipal employees, for example, as Boston, a city of similar size. Many of the District’s problems – including high pension liabilities and payroll costs – are tied to a public overemployment. During the good times of the ’80s, the city government could afford to mushroom. But the boom ended at about the same time the black middle class began moving to the suburbs. The blacks left to escape a violent crime rate that’s among the worst in the country. And they wanted to get away from schools that produce some of the country’s lowest test scores in math and reading, even though spending per student is among the nation’s highest.
The D.C. government is often criticized for spending money on salaries and pensions for bureaucrats instead of services for its citizens. Sullen workers staff dreary municipal buildings. At the headquarters of the first police district, for example, the copierhas been broken for four months, and unpaid bills mean that computers go unrepaired. Meanwhile, businesses and local private institutions complain about red tape and bureaucratic obstacle courses. When Georgetown University proposed building a power plant in 1990, it had togo through 20 review boards. Edward G. Marks, the head of a local contractors’ association, says that some of his members don’t want to work in the District. ““You have to wait all day to get your permits,’’ says Marks, ““or hire an expediting company that will stand in line for you.''
Congress will insist on cutting the payroll – something that Barry has largely resisted. To achieve that end, Congress is considering setting up an outside boardto take over the city’s byzantine finances. The condition for more federal aid will be sharp limits on spending and hiring. In effect, Congress would be treating D.C.the way the International Monetary Fund treats a developing country: putting tight strings on its largesse and sending in experts to clean house. Jack Kemp, former secretary of housing and urban development in the Bush administration, has proposed a conservative kind of ““international’’ solution: he would cut taxes and overregulation in D.C., hoping it would then mimic Hong Kong’s dynamic growth.
Aside from such full-scale interventions, another source of hopefor Washington lies in the changing nature of its population. Steadily, the city is becoming more international. It no longer suffices to describe Washington as two-thirds black, one-third white. In 1990, nearly 10 percent of Washington’s population was foreign-born, and the figure is rising, which gives the city a much-needed pool of entrepreneurial talent.
But Washington’s ultimate fiscal – and social – salvation probably lies with who leads it. Marion Barry shrugs off responsibility, telling Newsweek that the city’s financial crisis was ““inevitable.’’ Perhaps Congress, as it readies its rescue team, will do better. It could certainly do no worse.
