Lessons for tough economic times.

• Author: Boyle, Brenda
• Position: The Wealth of Cities: Revitalizing the Centers of American Life - Book review

The Wealth of Cities: Revitalizing the Centers of American Life

By John O. Norquist

Perseus Books

1998; 237 pages; $18.95

The Wealth of Cities is one of the classics, and a book that finance officers can turn to for lessons that are particularly relevant in today's troubled economic climate. It offers examples of actions taken by cities across the county to improve service and reduce costs, drawing heavily from the author's successes as mayor of the City of Milwaukee, Wisconsin. In addition to offering innovations and solutions from the front lines of government, Norquist provides historical background on the problems cities face in areas such as affordable housing, public safety, education, economy and trade, the environment, and social welfare. He emphasizes that cities can use their natural advantages to overcome challenges, if governments and elected officials are willing to step up to the plate.

Although The Wealth of Cities was written a decade ago, many of its ideas for cutting government spending and improving government services are timely and resonant today, especially as governments feel the pinch from the economic downturn. Finance officers should be especially interested in Norquist's chapter on "How to Cut Government Spending and Live to Tell about It." He starts out questioning why governments and elected officials have trouble using the private-sector concept of productivity to provide quality services the public wants, at a lower cost. Instead, Norquist says, elected officials often feel that spending cuts can only result in diminished services. To counter this general mindset, he provides multiple examples of governments and elected officials using cuts and reinvention strategies to cut spending and reduce the size of government, including Ed Rendell, former mayor of Philadelphia, Pennsylvania, who turned the city around after years of poor financial management. From 1991 to 1995, Rendell cut spending by more than $30 million per year and balanced the budget of the formerly bankrupt city. Rendell is now the state's governor.

Norquist says that "short of war or catastrophe, any government's operating budget should rise less than the rate of inflation. If it accomplishes this goal on a consistent basis, that government is meeting the first basic test of efficiency." To comply with "Norquist's Law," governments must avoid budgeting by crisis--using one-time revenues to fund operations--and elected officials must help managers...