Cities have muscle

Opinion: March 2, 2012 at 12:00a.m.

By Gar Alperovitz

McClatchy-Tribune

Cities are financially strapped today, but many are adopting innovative strategies that offer much promise.

From Lowell, Mass., to Berkeley, Calif., cities have discovered they can make better use of the millions of municipal dollars that temporarily sit in bank accounts. They do this by choosing where to place deposits based on banks’ willingness to relend those dollars to meet local community development goals and stimulate local economic development.

Direct city ownership of land and businesses is another successful approach. Republican and Democratic mayors alike are involved in efforts ranging from land development to Internet and Wi-Fi services. In many cities, profits from municipally owned electric utilities also help finance other services.

In Los Angeles, for example, the Department of Power and Water contributes about $190 million per year to the city’s revenues. Still other cities have created new businesses to promote local economic development.

Hundreds of municipalities, for instance, generate revenues through landfill gas recovery, turning the greenhouse gas methane (a byproduct of waste storage) into energy. Others have established programs to make equity investments in local firms and share in their success. San Diego has invested $2.5 million in an “emerging technology” fund targeting small businesses in low-income communities.

Public assets

Cities can harness other public assets to nurture the local economy. The ability of city governments to use the municipality’s purchasing power to keep business dollars circulating locally is vastly underappreciated.

In Cleveland, the purchasing power of the city’s existing “anchors” — not only hospitals and universities, but also local government itself — is providing a long-term market for a network of green worker cooperatives built in some of Cleveland’s poorest neighborhoods.

In an age of increasing fiscal crisis, we need comprehensive city-level economic planning.

Gar Alperovitz is a professor of political economy at the University of Maryland and the co-founder of the Democracy Collaborative. He wrote this for Progressive Media Project, a source of liberal commentary. It is affiliated with The Progressive magazine. Distributed by MCT Information Services.