Dire fi­nances leave Mo­tor City stalled

Detroit mayor re­sists pro­posed emer­gency takeover by the state

The Washington Times Daily - - Front Page - BY AN­DREA BILLUPS

De­spite as­sur­ances from Clint East­wood and Eminem, Detroit’s re­birth may be on hold, as the city is on a Greece-like track to run out of money be­fore sum­mer, and things are get­ting in­creas­ingly testy be­tween the state’s Re­pub­li­can gov­er­nor and the city’s Demo­cratic mayor.

Although the au­to­mo­tive sec­tor and some other parts of the city’s busi­ness picture have bounced back in re­cent years, Detroit city gov­ern­ment fi­nances are still on an un­sus­tain­able course, and the city does not have a vi­able fis­cal plan to avoid run­ning out of money in May.

Last week, the city re­jected a pro­posed con­sent agree­ment that would have given a nine-mem­ber state-ap­pointed over­sight board a voice in city gov­ern­ment and started a war of words with the state gov­ern­ment, which has its own dead­line set for next week.

Mayor Dave Bing said it would be “nuts” to think he would ac­cept the over­sight board. “When I did read it, I was ap­palled.” Mr. Bing and the City Coun­cil were ex­pected to meet this week to come up with their own plan, though such ef­forts have failed in the past.

The po­lit­i­cal co­nun­drum — the city

won’t cede power, but seem­ingly can’t solve its prob­lems — means an­a­lysts and ac­tivists here are in­creas­ingly re­signed to the pos­si­bil­ity that Michi­gan will step in and hu­mil­i­ate its big­gest city by ap­point­ing an emer­gency man­ager to take over its fi­nances, es­sen­tially turn­ing Detroit into an Amer­i­can ver­sion of Greece.

“Some­thing has to hap­pen. I think what ev­ery­body agrees is that the sta­tus quo is not sus­tain­able. The city is out of money,” said Michi­gan State Univer­sity econ­o­mist Charles Bal­lard. “I’m sym­pa­thetic to the con­sent agree­ment in the sense that right now it seems that it’s the only thing on the ta­ble. Lo­cal gov­ern­ments don’t like to be told what to do, so it’s un­der­stand­able that there is re­luc­tance in parts of the city.

“It re­minds me a lot of the debt cri­sis in Europe,” Mr. Bal­lard said. “The Greeks are re­sent­ful for this feel­ing they are be­ing told what to do by the Ger­mans, but the sta­tus quo was not ten­able.”

Michi­gan Gov. Rick Sny­der has re­peat­edly warned that time is run­ning out and that while it’s not his pre­ferred op­tion, the state would ap­point an emer­gency man­ager and strip power from the mayor and City Coun­cil if nec­es­sary. On March 26, an emer­gency re­view team he put into place months ago must come back with rec­om­men­da­tions on the need for a fi­nan­cial takeover.

That law let­ting the state do that has been used suc­cess­fully in such other Michi­gan cities as Ecorse and Ben­ton Har­bor. Detroit’s public school dis­trict has been un­der an emer­gency fi­nan­cial man­ager for sev­eral years in a re­or­ga­ni­za­tion widely con­sid­ered to have been painful but suc­cess­ful.

Do­ing noth­ing to pro­tect city ser­vices and keep the city out of bank­ruptcy is not an op­tion, Mr. Sny­der said.

“It’s not about [Mayor Bing] and I. It’s about show­ing re­sults for cit­i­zens,” the gov­er­nor said Fri­day in a WDHB ra­dio in­ter­view with host Mil­dred Gad­dis. “I have no in­ter­est in terms of in­ter­fer­ing in Detroit at all. It’s not Michi­gan ver­sus Detroit. We are in this to­gether.”

The gov­er­nor has planned town-hall meet­ings to get cit­i­zen in­put and to help ed­u­cate res­i­dents about the city’s fi­nan­cial prob­lems in ad­vance of any decision.

The no­tion of the state run­ning its largest city and the im­age it sends to the na­tion and world, how­ever, has an­gered many Detroi­ters, in­clud­ing some civic and re­li­gious lead­ers, who de­cry big-foot tac­tics from Lans­ing — even as money needed to fund po­lice, fire and emer­gency ser­vices and even pen­sion pay­ments — con­tin­ues to evap­o­rate.

Detroit Free Press colum­nist Rochelle Ri­ley told city readers Fri­day that time has run out and that the mayor has been too slow to of­fer so­lu­tions.

“Bing failed to fix the mess be­cause he was op­er­at­ing at 331/ rpm while the cri­sis was run­ning at 78,” she wrote. “(That’s a ref­er­ence to the vinyl records on my grand­mother’s stereo years ago. The 33s ran slow. The 78s ran fast. And the 45s were Mo­town).

“City lead­ers also are act­ing like no one is watch­ing,” she added. “Not the busi­ness com­mu­nity that is hold­ing out hope that Detroit will be back. Not the young fam­i­lies who want to move into Detroit be­cause they want to be in a city. And not the in­vestors and busi­ness own­ers from other states who might have thought that Detroit could be the next Cleve­land. . . . Sny­der, who is des­per­ately woo­ing them here, can no longer af­ford to let the state’s jewel — and Detroit once was that and can be again — col­lapse.”

Steve Toboc­man, a for­mer Michi­gan state rep­re­sen­ta­tive who now man­ages a con­sult­ing firm for com­mu­nity-de­vel­op­ment projects, says it’s clear that neigh­bors and res­i­dents need to talk more and pull to­gether to solve city is­sues in the wake of the bud­get cri­sis.

“We’re hav­ing a con­ver­sa­tion about who is go­ing to man­age cut­ting costs and rais­ing rev­enues, as op­posed to what we are go­ing to do in cut­ting costs and rais­ing rev­enues,” he said. “I don’t feel that the gov­er­nor or the coun­cil or mayor are ex­plain­ing that well to the gen­eral public.”

Like many other pro­fes­sion­als, Mr. Toboc­man, who used to rep­re­sent the city’s Mex­i­can­town area, says he chooses to live in the city rather than the sub­urbs, cit­ing its cul­tural ap­peal and tight com­mu­nity neigh­bor­hoods.

“Detroi­ters are proud folks, so of course hav­ing an emer­gency man­ager from the out­side, un­elected di­rectly by the peo­ple, to make those kinds of de­ci­sions for our city is dis­ap­point­ing. But at the end of the day, whether it’s our gov­er­nor, his ap­pointee or our di­rectly elec­tion mayor and City Coun­cil, some­thing has to be done to make tough de­ci­sions and cre­ate a road map here that works.”


A va­cant ware­house in Detroit is em­blem­atic of the Mo­tor City’s fi­nan­cial woes. Detroit’s fi­nances are on an un­sus­tain­able course, and the city does not have a vi­able fis­cal plan to avoid run­ning out of money in May. The state of Michi­gan may have to step in.

Detroit Mayor Dave Bing said it would be “nuts” to think he’d ac­cept a state over­sight board for the city’s in­tractable fi­nances. “When I did read it, I was ap­palled,” he said.

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