Racism adds to local financial woes -Harrisburg's former receiver

PROVIDENCE, R.I, March 18 Mon Mar 18, 2013 6:13pm EDT

PROVIDENCE, R.I, March 18 (Reuters) - Detroit, America's most distressed big city, may have some problems in common with Harrisburg, Pennsylvania, a much smaller city that has also struggled under a heavy debt load, Harrisburg's former receiver said on Monday.

Both cities' financial woes have been caused in part by the segregation of minorities and poor people, David Unkovic, the former receiver, said in a paper presented at a conference about distressed municipalities.

"Many of the core communities in Pennsylvania and around the country which are financially distressed have significantly more minority citizens than surrounding municipalities," he said.

Local governments tend to "isolate the poor, including many minorities, in defined political subdivisions where they receive substandard education, substandard services and substandard opportunities," he said.

Detroit's population of over 700,000 is nearly 83 percent black. The population of Harrisburg, the capital of Pennsylvania, at nearly 50,000 is about 52 percent black. Nationwide, the percentage of African Americans is around 13 percent.

With the state of Michigan now running the finances of Detroit and five other cities, nearly half of Michigan blacks have lost local political powers to the state.

Unkovic also blamed the finance industry for pushing complicated interest rate swaps, swaptions and other derivative products with names like "scoop and toss" onto local governments. Both Harrisburg and Detroit entered into such agreements, to their detriment, he said.

Unkovic abruptly resigned as the state-appointed receiver for Harrisburg in March 2012, in part because of the "political and ethical crosswinds" he faced.

In Michigan, Detroit's new emergency manager, Kevyn Orr, is working with advisory firms to craft a 10-year financial plan, the next step in the process since he was appointed on Thursday.

There should be a "rough cut" of the plan by May 1, Michigan Treasurer Andy Dillon said on Monday.

Dillon said the plan includes capital improvements and discussions of "growing the city."

"I do believe Detroit is very fixable," he said.

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Comments (1)
The transition of Harrisburg from thriving Capitol city to super chithole over 4 decades can be attributed to some simple factors.
Civil Rights, Affirmative Action, and Quotas tied to Civil Service JOBS became the main impetus of the influx of minorities to Harrisburg. If you do business with the PA Gubmit, you do it in Harrisburg, and you will be doing that business interfacing with minorities. With the windfall of cash into the Black community of this state capitol thru mandated minority hires, blacks from the entire eastern region poured into the city. Cheap older housing, modern amenities such as freeways and malls, retail and restaurants, art and cultural attractions, all offered additional opportunities servicing the needs of the monied Gubmit workforce.
The natural segregation of city and rural landscapes is obvious. Travel west across the river, rural whites with pockets of poor “local” minorities, travel east to Hershey and you will be hard pressed to see any minorities, travel south toward the Turnpike and lavish communities of Whites are carved out of farmlands. The city proper became a Ghetto to rival Philly, Reading and Baltimore.
Go ahead, hire some 6 figure intellectual to try and “solve” the perceived problem, toss common sense out the window.
Stop blaming these issues on Whites(racism) and White Privilege(more racism!), and recognize the FACT that when you see large numbers of minorities, you will have trouble. Namely low tax collection/revenues, high crime, low property values, yes, the STEREOTYPES you would expect.(just like Detroit, Oakland, S. Chicago, etc)
Come on, folks, it’s time we faced facts, and stopped kidding ourselves. Al and Jesse have refused to address the REAL issues, have you?

Mar 18, 2013 7:39pm EDT  --  Report as abuse
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