The Entrepreneurial City

The city of Saint Paul, Minnesota, has experienced chronic financial difficulty for the past several years. Although reductions in real wages of city employees, service cuts, and property tax increases could balance the budget in 1988, they would not be a permanent solution. Because of a structural imbalance between costs and revenues, Saint Paul's costs, driven by inflation, will routinely grow more rapidly than its revenues. This report examines a long-term solution to this problem superior to service cuts and layoffs. It describes a more entrepreneurial city, with new, more responsive revenue sources and new organizational structures for service delivery called Revenue Centers, which are intended to broaden the city's revenue base and respond to the demands of service consumers. Their increased use can lead gradually to the development of nontraditional sources of funding, including enterprise income, revenue ventures, and money-making sidelines, while also increasing both the opportunities and incentives for improved cost management.