Detroit Mayor Dave Bing is predicting that receivership may be an imminent solution to the city’s financial crisis. He’s even tossed out the notion that he might be interested in being appointed Emergency Financial Manager (EFM).
There may be a hundred reasons why an EFM would be a good idea for Detroit. There are also not-so-good reasons. But I can’t think of one why Bing should be in the running for the job.
Mayor Bing is complicit in the mismanagement of the city’s resources. Bing, a likeable, decent man, pledged during his campaign that his election would usher in a radical departure from the fiscal policies and practice of the past. His tenure, however, has been filled with missed opportunities that avoided the pain of tough decisions.
The thrust of his administration has been to keep the service infrastructure intact today, paper over the deficit and hope for an upturn in the economy tomorrow. A fundamental restructuring of city services was necessary for the city to balance its obligations with its revenue.
The city is projected to run out of money by February. That’s not surprising.
The mayor’s budget solutions have relied on stepped-up pressure on labor unions for more work-rule changes and other cost-savings. It’s also not surprising that employee unions have shown no interest in coming to the table to renegotiate their contracts.
It’s ridiculous to think that savings realized through squeezing the lifeblood out of labor unions will be sufficient to sustain a balanced budget. Nor will hiking parking meter hours, hiking People Mover fares, reducing bus routes and laying off large numbers of employees.
Raising taxes is no longer possible. Detroit is well above the level of taxation of most Michigan cities, villages and townships. The city can’t afford to drive out the few remaining productive citizens.
Stopgap measures have been a weak response to the financial distress and made Detroit a candidate for fiscal shock therapy that is likely to be administered by a takeover specialist.
Tossing around a cavalier idea like receivership is a superficially attractive idea that in fact is tantamount to a death wish. To see what will happen by going to an EFM the city need only look at the experience of Ecorse, Hamtramck Highland Park, Pontiac and Benton Harbor. In those cities, an EFM immediately rendered the concept of “home rule” impotent.
An EFM would have the authority to eliminate city employees, close facilities, renegotiate labor contracts and adjust pension costs.
Legislative power, budgetary power and approval of all contracts would revert to the takeover specialist. Absolute power would reside in the executive branch if Bing can convince the governor to make him the EFM.
To no one’s surprise, members of the City Council are not happy with the prospect of being forced to watch the government being reformed from the sidelines. Their opposition, though, has less to do with the necessity of the appointment, but because it would strip them of their power, perks and pay.
Detroit has run out of time and easy choices. Getting the city back on a sound footing means finding new ways to provide services at lower costs. This is only possible if receivership is taken out of the hands of politicians – the mayor and the council — and assigned to a non-political person who isn’t afraid to crack the whip.
The Bing administration is tired and lacks the will and experience to take bold initiatives. The mayor and council failed to get ahead of the curve by outsourcing or privatizing services it can no longer afford to offer.
Because the city can’t, or won’t rein in city spending, an EFM must be part of Detroit’s future at the earliest possible opportunity. Delaying the inevitable will only mean that residents will be subjected to more of the same poisonous brew of high taxes, declining services and political incompetence.