March 24 (Bloomberg) -- Mayor Leonard Urban deals with the dead. As Connersville, Indiana’s undertaker, he’s buried more than 6,200 people in the past half-century, giving him perspective on end-of-life matters. He says his cash-bleeding town isn’t ready to go yet.
Once known as “Little Detroit” because of its production of now-classic cars like the Cord, Auburn and Duesenberg, Connersville tracks its finances to the penny, and all the pennies will be gone in May. That’s why Urban, 71, declared a financial emergency three months into budget year. Bankruptcy and default aren’t on the table, but spending cuts are imminent, he says.
Bankruptcies and receiverships in Detroit; Stockton, California; and Harrisburg, Pennsvlvania, draw national attention as indicators of urban financial stress. Smaller communities quietly slide into trouble with a combination of declining population, stagnant household income and rising poverty. The culprit in Connersville, population 13,300, is the loss of a single employer -- Visteon Corp., which closed an auto-parts plant in 2008, throwing 900 people out of work.
“I’ll bet there are 25 cities that are in the same shape or maybe even worse than we are,” Urban said in an interview in his City Hall office. “They just ain’t got the guts to admit it and try to do something about it.”
Connersville, which celebrated its 200th birthday last year, is an example of a once-thriving town wed to a single industry such as textiles, coal mining, steel, shoes or, in its case, cars. The chamber of commerce recounts the town’s history on its website. The timeline stops in the late 1950s.
Unlike Detroit, the town didn’t overburden itself with debt. Connersville has only $16.2 million outstanding through 2034, including $1.4 million in obligations this year, according to the online Indiana Gateway for Government Units.
“This isn’t about debt,” said James Spiotto, a municipal bankruptcy specialist in Chicago. “The real problem is revenue.”
The beginning balance of the general fund has dropped $2.8 million in the past five years -- almost 60 percent since 2010. Empty storefronts, including one across from city hall that used to sell items pitched on television infomercials, are a common sight.
At one point, Visteon employed 5,000 workers in the town. Urban said the job losses, combined with a state law limiting property taxes, have crippled the town. He said that when he began his business at the funeral home in 1966, there was one cremation every other year. Now, because families want to save on burial costs, it is one of five.
Urban, with shimmering white hair, inclines toward dark humor when talking about the town.
“I knew from the first day I came here they were a disaster,” he said, referring to Visteon’s closing. “I pity the guy that comes after me.”
Yet he is determined to avoid the “borrow money and praying” solution. He’s proposed eliminating police and fire overtime and uniform allowances. City vehicles won’t let their engines idle. This could go on for years until new jobs and revenue arrive, he said. Without a quick cut in spending, the town won’t be able to pay its bills.
“This kind of shocked everybody,” said Scott Jones, president of the union local of the International Association of Firefighters.
Jones has been meeting almost daily with Urban to negotiate savings. “We’re just in a crunch. The tax base isn’t there,” he said.
The demographics of Connersville, which is about 60 miles (100 kilometers) east of Indianapolis, reveal the challenge.
Thirty percent of the population lives below the poverty line, according to the Census Bureau. Median household income is $29,900, compared with the Indiana average of $48,400. One out of four adults doesn’t have a high-school diploma, and only 7 percent have a bachelor’s degree or higher.
Fayette County, which encompasses the town, reported the state’s fifth-highest January jobless rate, 8.9 percent, according to the state Workforce Development Department. The Indiana figure was 6.6 percent.
Since the end of the recession in June 2009, Indiana has ranked 10th among states in its economic health, according to the Bloomberg Economic Evaluation of States. Yet in its rural areas, Connersville is no outlier, said Mike Hicks, an economist at Ball State University in Muncie. Indiana lost population in 54 of its 92 counties, including Fayette.
“It’s a real ugly one in Connersville,” Hicks said. “Indiana has a lot of communities that should be absorbed by others, or just go away. Yet they hang on.”
Urban rejects such thinking.
“This town’s been here for 200 years and it’s always going to be here,” he said. “What’s the future? You want me to lie to you or be honest with you? It’s going to take 10 years to get out of this.”
One year after the Visteon plant closed, a Los Angeles-based manufacturing company, Carbon Motors Corp., moved in with plans to convert to produce diesel engines for police cars. It promised more than 1,500 jobs.
A federal government loan didn’t materialize, and in March 2013 the company pulled out its equipment.
“It’s bad right now, but I know we’re the kind of town that will pull together to make things better,” said Donna Schroeder, who runs a downtown wallpaper and home-decor store. “Is that too Doris Day?”
Schroeder, standing next to a plaque reading, “God Bless Us Everyone,” said the town can make itself into an industrial version of Colonial Williamsburg, attracting tourists to see what once was.
For now, Connersville bears the signs of trying to move on, from shops offering cash for gold to the $1.69 fried mush special at the Chrome Cafe. A fair was held March 21 to attract application for jobs at a new downtown business -- flipping burgers at a Hardee’s fast-food restaurant.
To contact the reporter on this story: Tim Jones in Connersville at firstname.lastname@example.org
To contact the editors responsible for this story: Stephen Merelman at email@example.com Mark Schoifet