The Impact of Big Cities

Of the nation’s 100 largest cities, a whopping nine have GOP mayors. That’s a far cry from what the landscape looked like twenty years ago. Back in the 1990s, Republicans served as mayors in half of the nation’s 12 biggest cities, including New York and Los Angeles. But do cities really have a big impact on policies and economies at the larger state and national level?

Of the nation’s 100 largest cities, a whopping nine have GOP mayors. That’s a far cry from what the landscape looked like twenty years ago. Back in the 1990s, Republicans served as mayors in half of the nation’s 12 biggest cities, including New York and Los Angeles. But do cities really have a big impact on policies and economies at the larger state and national level?

That’s a big question. So let’s first take a look at the big picture. Throughout the decades between the Civil War and Great Depression cities such as Philadelphia were dominated by Republicans, and GOP candidates could expect to win cities like Los Angeles, Atlanta, Chicago and Detroit.

As political parties grew over the years so did the populations. More and more people spread out. Fueled by new roads, low congestion and modest energy costs people began moving out of the city and to the new suburbs. The suburban single family home on a large lot became a symbol of the American Dream.

Today, in New York, Democrats outnumber Republicans by more than 6 to 1. In New York City, DeBlasio won the biggest margin by a nonincumbent in history on a vow to close the gap between rich and poor. Besides New York, there are Democratic mayors in Austin, Chicago, Dallas, Houston, Cincinnati, Cleveland, Columbus, Los Angeles, Philadelphia, Phoenix, San Antonio, and San Jose.

Some say there are more Democratic mayors in big cities because of the Democrats persistent message on equal pay and economic matters, housing, and jobs for everyone, which are strongpoints and resonate better with people in big cities. But how true is this?

The liberal Brookings Institution released a report earlier this year that ranked the top 10 and bottom 10 cities by income inequality. Nine of the study’s most unequal cities have Democratic mayors. By contrast, seven of the 10 most equal cities have Republican mayor.

The point is that, in addition to factors like the state and national business cycle, demographic patterns and international business trends, the leadership of cities does play a role in the overall economy and the policies and regulations of big cities matter.

One of the most glaring examples of this is in Detroit. The city’s $18 billion debt is the biggest municipal debt filing in history. It created waves of bad national press. While the bad publicity certainly didn’t help anything, it wasn’t the worst thing.

The most important way Detroit’s bankruptcy could have an impact on Michigan and other small governments is its threats to municipal bonds. Bonds are really important to local governments. The better the bond rating a municipality has, the lower the interest payment and the more money it saves. Detroit is an example of how the corruption and mismanagement of one elected official can have an impact on the larger state as a whole.

Another local example is Cleveland’s income taxes on athletes, for which it’s now being sued in the Ohio Supreme Court. Cleveland taxes all the athletes on a visiting team for every game, even players who are hurt or don’t attend, which is the case in this lawsuit. Two former football players are suing Cleveland for refunds because they feel the taxes are an unreasonable overreach. Cleveland is the only city that uses a different tax formula, deducting significantly more from paychecks than other states and cities.

This isn’t the first time income taxes have been an issue. The overall income tax rate for families is still high Ohio.

There are alternatives to using policies such as individual income taxes for government growth. The pattern for long term economic growth comes from smart decision making and the reduction of egregious regulations that stand in the way of small business and entrepreneurs. The policies of localities can have an impact in many ways, which is why it’s important to remain watchful of what’s going on at the local levels.

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