Ideas for Saving Cleveland

Cleveland has never been a glamorous town, but it used to be lively and successful. Now it's a poster boy for Rust Belt decline. It doesn't have to be that way.

To confront the public policy options for America's decaying cities, reason, reason.tv, and the Reason Foundation teamed up with Price Is Right host Drew Carey—one of Cleveland's most famous native sons and tireless boosters—and worked on ways to get the city out of the doldrums. The result was a series of videos, policy papers, and articles, all viewable at reason.tv/cleveland, urging Clevelanders to take a hatchet to their regulations, privatize government functions, abandon corporate welfare projects, and bring consumer choice to the schools to win back businesses and residents.

Will Cleveland take reason's recommendations to heart? Well, the series made the front page of the Cleveland Plain Dealer twice, and the City Council has invited Carey to come make a presentation in person. If nothing else, we have started a conversation about some of urban America's most intractable problems.

The following are condensed descriptions of Reason Saves Cleveland segments and corresponding Reason Foundation policy briefs. 

Fixing the Schools 

Cleveland's public schools face a $53 million budget deficit, an enrollment drop of about 40,000 students during the last decade, and a scandalously low 54 percent graduation rate. Close to three-quarters of the district's schools are either on "academic watch" or in an "academic emergency," the state's two worst categories.

To turn things around, Cleveland should rethink the way money moves within its school system. Education funds should be attached to each student, allowing him to carry it directly to the public school of his choice. Special-needs students can bring larger amounts of money, reflecting the extra help they need. Under such a system, administrators can use the money they attract for whatever they want, be it more instructors, more technology, or more supplies.

Cleveland also should promote charter school models and take a hard line with struggling institutions: Close failing schools. Open new schools. Replicate great schools. Repeat as needed.

The power of competition will drive success in education. The better the school system, the more people will want to move back into the city, and the more young parents will be willing to stay.

More here: reason.org/news/show/fix-cleveland-schools

Episode: reason.tv/video/show/1041

Archive: reason.org/areas/topic/ education

Privatizing Services 

The more fiscally sound a city is, the more attractive it is to current and prospective residents. Fiscal stability means citizens have less cause to fear tax increases or cutbacks in services. One tool Cleveland could use to help stabilize ailing city finances is outsourcing.

For privatization to be successful, it is essential that local governments identify sound measurements to compare competing bids fairly and to accurately evaluate provider fulfillment. With such measurements, a transparent process, and open bidding, contracting out swaths of services across several departments—such as public works, information technology, or facilities management—would help Cleveland realize economies of scale and cost savings while receiving better value for the money.

Service providers would have an incentive to provide good services while keeping costs to a minimum, lest they lose the contract to a more efficient competitor. As a conservative rule of thumb, cost savings through privatization typically range between 5 percent and 20 percent.

More here: reason.org/news/show/cleveland-ten-privatization

Episode: reason.tv/video/show/1042

Archive: reason.org/areas/topic/ privatization

Attracting Business 

After World War II, Cleveland was a boomtown, thanks to its leading role in heavy industry and a business-friendly climate. Today the city's high taxes and onerous regulatory demands make it nearly impossible for new businesses to set up shop while choking the life out of the companies that remain. Once the seventh largest metropolis in the United States, Cleveland now ranks 41st.

The city can't rebound without an environment in which enterprises can flourish. Local governments with heavy tax burdens place themselves at a competitive disadvantage. Cities with simple, limited tax structures are much more successful at encouraging business development. Local leaders should be well aware by now of how taxes can weigh down economic growth. As Cleveland has gone into decline, taxes have climbed dramatically: In 1977 Ohio ranked 45th in state and local tax burden; in 2008 it ranked seventh.

Entrepreneurship is a vital part of urban economic growth. Local leaders should work to limit red tape, simplify the regulatory process, and seek opportunities for limiting license requirements. Excessive business taxes, local sales taxes, property taxes, and fees are all more likely to drive entrepreneurs out of the city than build a sustainable tax base. 

More here: reason.org/news/show/cleveland-jobs-business

Episode: reason.tv/video/show/1043

Archive: reason.com/topics/taxes

Promoting Real Growth 

Like many cities with dying downtowns, Cleveland has an edifice complex. The city's latest scheme to stimulate the economy is a pricey new convention center. But economic studies have consistently shown that massive projects like stadiums, aquariums, and museums fail to deliver. Cleveland should follow these three principles to promote real bottom-up development:

Protect life and property. The most basic function of government is to protect the personal safety of its residents and businesses. A safe city will attract a wide spectrum of residents from college graduates to families, businessmen to seniors.

Make government transparent and accountable. Transparency boosts confidence and the quality of services. That's why former Mayor Michael White initiated the "citizen's budget," so that residents and businesses could monitor government performance. Unfortunately, the concept appears to have fallen by the wayside: The current mayor's 2010 budget is a bulky, 420-page document.

Pay attention to core infrastructure. Potholes count more than pipe dreams. A road network that maximizes mobility is critical to facilitating the flow of people and goods. Well-functioning sewer and water systems are essential to support existing businesses as well as future growth.

More here: reason.tv/video/show/1090

Episode: reason.tv/video/show/1044

Archive: reason.org/areas/topic/ redevelopment-and-revitalization

Bringing Back the People 

One basic measurement for a city's success is population growth. In that respect, Cleveland has been an abject failure, shrinking from nearly 1 million in the 1950s to about 430,000 today.

Yet the city is not without hope. Cleveland, unlike many other Rust Belt cities, enjoyed a thriving urban culture in the not-too-distant past. Residents can still enjoy three professional sports teams, world-class museums such as the Rock and Roll Hall of Fame, and various highbrow pursuits.

But it's not cultural amenities that attracts people to cities; it's economic activity. The orchestra, museums, and theaters are artifacts of an era when Cleveland was an industrial powerhouse that produced tons of cash. The newer venues, by contrast, are monuments to the empty promises of Cleveland politicians. They were built with hundreds of millions of taxpayer dollars through sweetheart deals cut during the city's long economic decline. And while the Cavaliers provide a great entertainment option for visitors from the suburbs, you can't judge a city's health by the success of its regionally popular basketball team.

For Cleveland to bring people back, officials need to realize that real economic growth happens from the ground up, not through top-down spending projects. Build a livable city without an oppressive government, and the people will come.

More here: reason.tv/video/show/1091

Episode: reason.tv/video/show/1045

Archive: reason.com/topics/corporate-welfare