Thread by @FeferNahuel

BT is building a minimal city. I encourage anyone trying to wrap their heads around what BT's tax cuts and manufactured budget crisis would mean for STL to read Stanford Law Professor @MWildeAnderson’s “The New Minimal Cities” (yalelawjournal.org/article/the-ne…).

Main takeaways: 1. Fiscal crisis hurts poor people the most; 2. Minimal cities represent the libertarian ideal; 3. BT’s treatment of city debt is problematic. More details below:

1. Fiscal crisis hurts poor people the most. Anderson explores “local adaptations to fiscal crisis” and finds that, because raising revenue is often “politically infeasible, legally impermissible or economically undesirable” governments are forced to cut services and sell assets:

Cutting (1/4): “when cities had lower total revenue per capita, they increased developmental spending and reduced redistributive spending”. In fact, a city’s fiscal health predicts redistributive spending more accurately than indicators of need, like poverty or unemployment.

Cutting (2/4): When forced to make cuts to public safety, “reflecting budgets that look more like triage than primary care, cities have cut most deeply into non-emergency response, crime prevention, and community policing strategies”

Cutting (3/4): BT’s pro forma budget assumes that government expenditures will shrink by 1% annually for ten years. Adjusting for 2% inflation, the region is expected to cut roughly $75M (three percent) out of the budget annually for ten years, shrinking government by 26%.

Cutting (4/4): BT focuses cuts on redistributive programs. Debt payments, municipal property tax revenues, and the fire department’s budget are all legally insulated from cuts, while spending on police, streets, and infrastructure are politically and operationally insulated.

Selling (1/4): “The Public response to severe fiscal crisis can look a great deal like an inefficient liquidation…desperation to cut costs can lead to the sale or seizure of assets that compromise long-term viability…[and] can generate less value than those assets are worth”

Selling (2/4): while “persons with discretionary income” can pay the fees and charges associated with privatized services, in areas with high rates of poverty and unemployment, “Privatized versions of shared amenities are simply unaffordable to most residents.”

Selling (3/4): “while loose claims regarding private service providers’ cost savings, efficiency, and quality of services are quite common, extensive empirical research on outcomes from local privatization consistently demonstrates that specific circumstances matter a great deal”

Selling (4/4): Anderson emphasizes that, when the privatized service has few private providers, privatization “can turn costly public monopolies into costly private monopolies”. The application of this insight to Lambert Airport, which is currently well run, should be obvious.

Fundamentally: “there is such a thing as a local government that gets too small, weak, and ineffective to provide basic habitability for a high poverty population” or “provide the basic cornerstones of American upward social mobility - personal safety and educational opportunity”

2. Minimal cities represent the libertarian ideal: Anderson explains that “high-poverty, insolvent cities” with services “confined to bare bones public safety with little to no redistributive spending” embody libertarian philosopher Robert Nozick’s “nightwatchman state ideal”

Sinquefield bonus: The Show Me institute features in Anderson’s “Dissolving Cities”, a precursor to this article. She cites them as an example of the libertarian instinct behind efforts to dissolve cities. BT replaces the City of St. Louis with a municipal corporation.

Anderson explains that libertarian government doesn't work for most people: “The shrinking of local government in high-poverty cities describes a troubling experiment with prosperous people’s government for poor people.”

3. BT’s treatment of city debt is problematic: Instead of pooling the city and county’s debt, it dissolves the city and put its debt under the authority of an appointed municipal corporation which owns city assets but is not responsible for providing services.

This is intuitively unfair, since the city’s debt was spent building/maintaining regional infrastructure. Anderson takes it a step further, noting that cities “facing a pension overhang related to population loss are carrying the load of a larger spatial territory's residents”.

Anderson concludes that “the argument for state bailouts on pension liabilities is stronger in cities that have lost population to their metropolitan areas or to the rest of the state” but the logic clearly applies to regional burden sharing.

BT’s refusal to pool city debt is especially inexplicable given that the County’s debt flows through to the new Metropolitan City. I also worry that the municipal corporate structure could have serious implications for bankruptcy proceedings, but don’t want to speculate yet.

If you've read this far, thank you! Signing off with an obligatory link to my article, which lays out how BT’s anti-democratic plan will exacerbate inequities in more detail: riverfronttimes.com/stlouis/how-be…