Manhattan Institute

Insult to Injury in the Rust Belt

The region’s economic problems are challenging enough, but political corruption makes them even harder to address.

By now, media stories recite a familiar litany of problems in post-industrial cities, especially in the Rust Belt: blighted neighborhoods, dwindling employment, fiscal distress, failing schools, rapid demographic change, aging populations, evaporating tax bases, and an opioid crisis. Less noted, though, is a widespread problem of political corruption, which afflicts many city halls—and makes it even harder to address the troubles plaguing the region.

Scranton mayor Bill Courtright, first elected in 2013, resigned office this month after pleading guilty to federal public-corruption charges. While governing a city of 78,000, Courtright extorted bribes from vendors—in one case, storing thousands in cash from a delinquent bill collector and a developer in a house safe. His downfall comes as the state attorney general probes the Scranton School District for corruption.

Within the past year, former Allentown mayor Ed Pawlowski and former Reading mayor Vaughn Spencer were both sentenced to prison on federal corruption charges. In Harrisburg, a state audit found that the school district wasted millions on salaries, contracts, and benefits. This follows a two-year probation period served by six-term mayor Stephen Reed, who pleaded guilty in 2017 to stealing artifacts from the capital city’s museum. In Ohio, Youngstown’s former mayor and finance director were indicted last year on more than 100 criminal charges.

Public graft is an age-old presence in urban governments, especially those under one-party rule. In 1903, reporter Lincoln Steffens famously declared Philadelphia “corrupt and contented,” and it was hardly the only metropolis that could be described that way. For decades, corruption was a byproduct of industries that supported the Rust Belt’s urban economies. But as factories closed, municipal offices have emerged as the primary employers in post-industrial cities.

As Scranton and Youngstown show, corruption and contentment have become institutionalized features of local governments: school districts hire teachers through patronage systems, municipal authorities overpay underqualified employees and board members, and city halls raise taxes to accommodate the same public unions that use their members’ dues to elect the officials who negotiate their pay. Such patterns only accelerate a city’s downward fiscal spiral. Scranton and Reading, for example, remain in the state’s program for financially distressed cities—the latter having one of the nation’s poorest populations. In Harrisburg, which filed for bankruptcy in 2011, the school board recently approved state receivership of the city’s school district.

Oversight of local government will likely worsen as more newspapers disappear. In June, after failing to find a buyer, the 150-year-old Youngstown Vindicator announced that it would cease publication at the end of the summer. As the Washington Post reported, the Ohio city “will become an unfortunate first: a good-size city with no daily newspaper of its own.” The Youngstown metro area, long known for its disgraced public officials, will no longer have a paper to report the local news to its 500,000 residents. “Public corruption here is deeply rooted,” one 40-year Vindicator veteran told the Post. Joel Kaplan, associate dean of Syracuse University’s Newhouse School, reflected on a future of unreported school board and city council meetings: “Democracy, as we know it, is about to die in Youngstown.”

The collapse of local papers has spared northeastern Pennsylvania, at least for now. Dailies and weeklies still pile up at convenience-store newsstands in cities like Scranton, but residents are suffering the consequences of failed—and often corrupt—leadership. As the Associated Press recently reported, Scranton’s tax burden is the largest in Lackawanna County. “A city homeowner earning $24,311 annually, the median earnings in Scranton, spends about $137.65 of every $1,000 in wages on municipal, school, and county real estate taxes and local wage taxes,” the AP noted. “The same city resident pays almost $2,520 a year in property taxes alone, which could amount to more than two months of income for some elderly or low-income residents.”

The story profiled an older resident who has inherited her parents’ home—a regional tradition—on the city’s South Side. Struggling to pay rising tax bills, she now fears the loss of her home at a tax sale. “I think many people would think ‘Just leave.’ And how am I going to leave when a third of my income goes to taxes and I have a mortgage on the house? . . . I don’t want to leave. It will hurt me terribly.” This sentiment is typical in Scranton, where a fixed-income population living in deteriorating housing in declining neighborhoods struggles to pay burdensome local taxes for services managed by fewer and fewer competent—or honest—elected officials.

Corruption only intensifies the Rust Belt’s many serious challenges. Without change, the young will seek opportunities elsewhere while older residents see their incomes eroded by rising taxes and other costs. As the region confronts social and economic tumult, it needs leaders who can navigate an uncertain future with competence and integrity.

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