Fiscal Crisis in Detroit: The Hard Part

There’s not going to be a silver bullet when it comes to righting the financial woes that the city of Detroit faces.  Simply put, the city spends far more than it takes in.  That’s been the case for many, many years.  The basic response of the city government, at least up until they were forced to take another route, was to point at everyone but themselves in order to dole out the blame.  The big target for city leaders was revenue sharing with the state, a prospect that never materialized after Detroit failed to live up to its end of the bargain in reducing the city income tax.

That doesn’t stop city leaders from still griping about how the state ‘owes’ them money.  Now that the city has finally accepted, at least somewhat, that they’re not going to get the money from the state, they’ve resigned themselves to the fact that they’re going to have to cut, and cut a lot.  And that’s setting the stage for another round of struggles, with pretty much anyone who stands to lose under the new regime of fiscal prudence.  The next pissing match will be with the city worker unions.

Detroit has long had a workforce that’s far, far larger than what the actual demands of the city call for.  Somewhat counterintuitively, despite the fact that they’re staffed to the gills, they don’t manage to perform their functions satisfactorily.  Cops take forever to respond to calls, city lights don’t work and bus drivers routinely pass by the stops they should stop at on their routes.  The fact that there’s so many of them, yet they still manage to adequately perform their vital functions is simply insult added to injury.  As a result, these redundant workers find themselves on the chopping block in what is the financial restructuring in Detroit, and rightly so.

One would expect unions to adopt a more conciliatory tone, pledging to work hand in hand with the city in order to get the best possible deal for their members, much as unions worked in Germany with management to avoid layoffs.  This, however, is not the case.  As you may have been able to guess, they’re figuring out crafty ways to subvert the laws that ban public sector employee strikes.  The city signed the consent agreement or restructuring deal, or whatever you want to call it, and, frankly, that was the easy part.

The hard part is in actually getting the books to balance, and, at the same time, to get the mentality of the city stakeholders to change as they do it.  The city of Detroit, first and foremost, is not there to provide guaranteed lifetime cushy jobs for everyone who needs one.  The city of Detroit exists in order to provide those services that a city needs most to grow, safely and stably.  Changing the mindset, more than anything, will be the hard part.  Once that’s done, more than anything, the city should be able to right itself, financially.  Until then, every cut will be like pulling teeth.


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