In the spring of 1975, New York City confronted the most severe financial crisis that any large city in the U.S. had faced since the Depression. By the time the crisis was resolved, the City had implemented the nation’s most comprehensive budgeting and accounting system of any municipality in the country, and labor unions – contrary to the prevailing theory describing their behavior – had become the City’s bankers and partners in reducing expenditures through downsizing and deferral of wages/benefits. Moreover, new mechanisms for exercising fiscal control over the City had been created (the Municipal Assistance Corporation – “MAC” – and the Emergency Financial Control Board – “EFCB”); the political careers of many individuals had come to an end; and unique coalitions of labor, business, government and other key groups, such as the Municipal Union/Financial Leaders Group (MUFLG), were formed to identify and implement solutions which would reestablish the fiscal integrity of the City and the nation’s laws governing the municipal bankruptcy process were rewritten.
Many of the persons who were involved in resolving the City’s fiscal crisis of the 1970’s are no longer active in government, and the memory of their resolve to place the City on firm footing has faded. That crisis and the responses of the various players and stakeholders provide unique opportunities for elected officials, government professionals, and the public to understand the conundrum confronting cities in the provision and financing of public services. The documents and other records from this event form a richly textured and nuanced set of source materials and narratives that illuminate the workings of American federalism – the interactions among the three levels – as well as the interplay between the executive and legislative branches of government. The singular sequence of events provides a rich body of material upon which to develop programs to educate successive generations about the workings of government and the importance of public-private partnerships in resolving complex public policy issues. For instance, it has been impossible to replicate the coalition building that brought union, business and government leaders together to save the City from bankruptcy. Learning how to build effective coalitions to solve other crises that face government, such as health care, housing and education is essential.
By making available materials covering the City’s 1970s fiscal crisis in the Archive on Municipal Finance and Leadership, the School of Public Affairs aims to provide scholars, practitioners and the public access to an unparalleled, and yet to be mined, set of materials that have immense policy and historical value. The Archive was established with the records from the Municipal Assistance Corporation (“MAC”) and oral history video tapes, and other materials assembled by Mr. Jack Bigel who, as a financial adviser to many of the City’s labor unions, was a central figure in resolving the financial crisis. As the Archive develops other collections will be added along with links to digital holdings at other institutions.