PhillyDeals: Radical fix for Phila., Camden problems

Is Philadelphia in the wrong state?

"The city, state and federal officials who represent Philadelphia should approach elected officials in New Jersey with a plan to redraw the Pennsylvania-New Jersey border so that Philadelphia becomes part of New Jersey," writes Drexel University professor Richardson Dilworth in the Notre Dame Journal of Law, Ethics and Public Policy.

Why switch, after 300 years?

For power and money.

"Philadelphia and Camden can be consolidated into a single city," easing Camden's dependence on its decrepit tax base and fat state subsidies, wrote Dilworth.

Philadelphia would be nearly one-fifth of New Jersey, instead of one-eighth of Pennsylvania.

There's something in it for both political parties: City voters would boost New Jersey's dominant Democrats, and leave Pennsylvania's ascendant Republicans more firmly in charge.

But it's important not to stop at today's city lines, adds Dilworth. This isn't just about ramming two underfunded, poverty-blighted cities together.

Consolidation of Philadelphia and Camden, Dilworth wrote, should also include some of Camden's more affluent New Jersey neighbors. "Starting, say, with Pennsauken, then Collingswood, then Merchantville, then Woodlyne, and so on - until there were enough higher-income communities added to compensate for the tax burden of Camden," Dilworth wrote.

Why New Jersey? Pennsylvania's suburbs have a 150-year history of walling off the city and preventing its further expansion, Dilworth notes.

By helping solve the problem of Camden's high poverty and weak tax base, and with Jersey suburbs as a sweetener, Philadelphia might find less resistance to growing its way past its narrow historic borders.

Outrageous? Intolerable, for chauvinists of Camden (or Cherry Hill, or Haddonfield)?

In mergers, even hostile takeovers, private firms "play states and municipalities against one another in order to extract the greatest benefits of locating," Dilworth writes.

What's his point, really?

"In suggesting Philadelphia move to New Jersey, I am merely suggesting that cities act more like private firms," Dilworth says. Joining forces would allow them to cut expenses, eliminate waste, and boost returns to owners and services to customers - the people who live there and pay the taxes.

I ran Dilworth's radical exercise by F. John White, head of PFM Group, the Philadelphia-based firm that the Bond Buyer newspaper ranks as the nation's largest adviser on municipal bond sales.

I figured White might defend town borders as they exist, since the multiplicity of governments, agencies, and tax-backed nonprofits in states like Pennsylvania and New Jersey keeps municipal bonds a lucrative business, even if all that borrowing costs their taxpayers a mint.

But White looked past the radical question of switching states, and noted Dilworth's main point: Taxpayers can't forever afford so many local governments, agencies, school and service districts, where expenses rise faster than the typical private-property owner's paycheck.

They would cut costs if they could consolidate with their neighbors, pool their resources, reduce business taxes, and thereby attract new employers and residents.

How hard is that, and how hard should it be?

"In the Northeast we don't have [urban] annexation laws. But much of the rest of the country does," White told me.

Louisville, Nashville, Indianapolis, and other growing cities have famously seized their suburbs, throwing local police chiefs and school superintendents out of work, cutting costs, and expanding their tax bases so urban rates can go down.

Politicians as diverse as State Rep. Thomas Caltagirone, (D., Berks) and Republican Gov. Christie of New Jersey have also called for municipal consolidation at various levels. But in Pennsylvania, especially, the mainstream in both parties have resisted.

I told White I always figured that's because our Democrats and Republicans depend on local governments and politically connected enterprises, especially in the many towns where most people don't vote and can't even name their representatives, to give out jobs and contracts that keep both parties fat and happy at public expense.

White prefers to emphasize the positive: "People like local control. They have so far been willing to pay for it. They may some day decide it's a luxury they no longer want to pay for."

Like Dilworth, White noted that Upstate Pennsylvania officials of both parties often run against the big city, or are reluctant to support it.

Lately, he says, that's not so much because the city is perceived as poor and black, but for almost the opposite reason:

"If you're a decision-maker and you visit Philadelphia, you don't go to North Philly; you stay in Center City," White said.

"You go to a nice hotel. You see all this economic development that's been happening down here, the nightlife, the cultural life, the restaurants.

"And then you go back to your hometown and you say, 'What's the problem?' "