Budget Questions By Shea Howell

Thinking for ourselves

Budget Questions

By Shea Howell

April 24-May 5, 2012

The first round of budget cuts under the newly evolving Consent Agreement is unfolding. It is not pretty. Mayor Dave Bing is proposing to cut 2,566 city jobs. He is also calling for an across the board 10% pay cut for all city employees and the consolidation or elimination of some departments, including health and wellness, workforce development, human services, and the Municipal Airport. Bus transportation and street lights would be privatized.

According the Mayor, the $160 million reduction in spending is an effort to focus financial support on core services: public safety, transportation, lighting, garbage collection, parks and recreation, streets and landscaping and permits.

This budget process is fraught with questions. Councilwoman JoAnn Watson posed some of the most important, asking, “Who has decided what core services are? Who decided recreation would be cut by 50% but general services, which is a new department, is now a core service?”

Councilman James Tate, who voted to give away council authority to the state, is concerned over cuts to the law department.

Councilwoman Saunteel Jenkins, who also voted to give away city council authority, is concerned about elimination of the health department.

Almost everyone agrees that the financial impact on the city will be far greater than the loss to individual paychecks. Scott Watkins of the East Lansing based Anderson Economic Group gave a conservative estimate of $128 million reduction in direct disposable income. He also projected an additional $51 million loss in benefit spending.

Missing from this calculation are the human and community costs. First there is the question of what happens in our neighborhoods as services diminish? How many of those who are eliminated from the work force will move out of the city by choice, taking their talent, experience and creativity elsewhere? How many will be forced out of houses, unable to find employment here or to keep up homes, losing them to foreclosure, ultimately destabilizing our neighborhoods even more? How many small businesses will have to lay off additional workers because people are no longer able to purchase their services?

The reality is that city jobs not only provide essential services, they are deeply woven into the economic fabric of daily life.

This current budget, no doubt developed closely in line with the wishes of Governor Snyder, will greatly diminish the quality of life for many of us.

Further, the budget projects a continued decrease in revenue from its top five sources: property, income, utility and gaming taxes, and state revenues. The current $821 million is expected next year to go down to $739 million. Currently, the city is losing 20,000 people a year, and with them their contributions of not only revenue but imagination and energy.

Thus this budget is evading the major questions of how to generate new revenue for the city. Two areas need to be considered. First, over the last 3 decades, Detroit has given away millions of dollars in tax breaks to corporations. We have done this with the encouragement of state and federal policies. For example nearly 19 square miles are included in our renaissance zone that includes tax abatements, tax exempt bonds, public loans and grants. Since we are in a financial state of emergency all of these “incentives” need to be renegotiated.

Second, the state needs to impose a regional tax for the support of core services in the city. The reality is that Detroit provides for much of the growth and health of the surrounding counties, who drain rather than support us. Citizens from surrounding communities enjoy our streets, theaters, music, cafes, art, waterfront and sports, and they should contribute directly to the streets that take them there and the all our public services.

The constant diminishment of the city will serve no good end. We all should take a vigorous role in the budgeting process and demand the re-evaluation of how to be collectively responsible for public services.


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