The $3.1 billion budget submitted by Detroit Mayor Dave Bing to the City Council is a weak response to the financial distress facing the city. More than unsustainable, it practically invites the imposition of what the mayor contends he’s trying to avoid: an emergency financial manager.
To offset a $155 million deficit in the current year and prevent a potential higher shortfall in the fiscal year beginning July 1, the mayor proposes to step-up pressure on unionized employees. He’s obligated to try to bring spiraling health and benefits costs under control. But wrestling concessions from workers will be difficult under the best of circumstances.
Police and fire personnel are virtually excluded from unilateral concessions by compulsory arbitration provisions in state law. Since other employees have already been tapped for wage reductions they can’t be expected to willingly show up at the bargaining table and empty their pockets at the mayor’s request.
Real budget balancing may require a radical program restructuring and contracting-out of the service portfolio. Some cities, for example, have sold airports to private concerns. Health care functions can be responsibly managed by a private entity like the Detroit Medical Center. Municipal parking and garbage collection are prime candidates for management by outside agencies. The possibilities are endless.
As a matter of record, Bing campaigned as a reformer. Today, he looks forward to a second term while looking over his shoulder for potential challengers. As such, he apparently doesn’t have the stomach for a protracted down-and-out confrontation with labor-supported constituent groups. He’s seen what’s happened in Wisconsin and what’s occurring in Lansing as real budget-cutters take aim at exorbitant costs.
That explains why he made no mention of privatization, or touch on the prospect of merging or sharing services across political jurisdictions as a means to balance the city’s obligations with its revenue. These are controversial policy choices, for sure. But unless the outsourcing option is put on the table, the city has no strong bargaining leverage with employee unions.
Even if successful in tightening the screws on employees, the savings won’t be enough to sustain a balanced budget. The mayor buys more time and conserves his political capital in the short term, but at some inescapable future date he can’t avoid the pain of more draconian cuts.
The worst fantasy-world budget proposal is his wager that the Legislature will temporarily change state laws to allow the city to raise $20 million with an additional 3-percent tax on casinos. The city has already maxed-out other taxing options. But for Mayor Bing to look to a bailout from Lansing that soaks casinos is neither bold nor courageous.
Conforming to this request could effectively kill the goose that lays the golden eggs. It sends the signal to future investors that if they show a profit, the city is not above taxing them to the core. It’s also discriminatory in that it singles out casinos, arguably money-guzzling machines, but not a cash cow to be gouged on a whim.
The budget dilemma reveals the absence of economic growth. Detroit can’t compete for jobs or residents with its neighbors — and won’t unless city officials establish sensible fiscal priorities that encourage investment, cut spending and give taxpayers the best bang for their buck. Heaping more taxes on businesses is not the kind of reputation the city needs as it tries to recover from an economic predicament characterized by a declining population and a shrinking tax base.
Unfortunately, the mayor’s stop-gap budget proposal adds up to a ritualistic retreat to “past practices” rather than the kind of “best practices” suggested by Gov. Rick Snyder. It puts Detroit on course for fiscal shock therapy in the form of an emergency financial manager. Maybe that’s Mayor Bing’s objective, and apparently what’s needed for the city to get its fiscal house in order.