The city of Detroit, threatened with the largest municipal bankruptcy in US history, is slowly becoming resigned to a state-ordered rescue by an Emergency Financial Manager.
The action by Governor Rick Snyder to empower the EFM to take over the city’s day to day finances is a blow to Mayor Dave Bing, former Detroit Pistons NBA star, who claims his “plan” to save the city was never allowed the time to work. And the city president is warning citizens that the road back to solvency will be long and hard.
Is the governor caving to pressure from the suburbs? Detroit City President Charles Pugh said that’s a fact, as Rick Snyder on Friday declared a financial emergency in Detroit, setting the stage for a state takeover.
Pugh said, however, while there is pressure from outside the city, he’s certain there are people within Detroit who would welcome a state-appointed emergency financial manager.
“Because they’re tired of it lingering. They want to get it over with,” Pugh told WWJ Newsradio 950′s Pat Sweeting.
But what those people don’t realize, Pugh said, is that an EFM won’t just be in and out. ”It doesn’t work like that. And if it doesn;t work like that in smaller cities, why in the hell would they think it would work in a city as complicated as Detroit?”
Pugh pointed out that emergency financial managers were appointed to oversee the Detroit Public Schools, and, years later, the second EFM there is still on the job.
Also among those who oppose the EFM move is U.S. Congressman Gary Peters, who said he’s “deeply disappointed” in the governor’s decision.
“All of us agree that the city has serious financial challenges which must be addressed, however I fundamentally disagree with taking measures that disenfranchise the families I represent in Detroit,” Peters said, in a statement.
City leaders have 10 days to appeal Snyder’s ruling, before a manager is put into place — but it wasn’t immediately clear if Detroit Mayor Dave Bing would do so.
Said Bing on Friday, “The governor has made his decision, and it was his decision alone to make. While I respect it, I have said all along that I do not favor an emergency Manager for the City of Detroit. I will look at the impact of the Governor’s decision as well as other options, to determine my next course of action.” (Read his complete statement here).
Former city council member Sheila Cockrel said she realizes it’s a tough pill to swallow, but she believes an emergency financial manager is a necessity for Detroit.
Cockrel said a financial manager can do the job without the same constraints as local elected officials. However, she said an EFM can’t do it alone.
The question isn’t so much what can be done, but rather can anything be done? Once the fourth largest city in the US, Detroit now ranks 18th — and falling. The city can’t even fix its street lights, which gives criminals a comforting darkness to carry out their crimes. Public services like police, firefighters, public transportation, and schools have all been cut to the bone. What good could an EFM do in this situation?
Some believe, not too much:
The major issue with implementing these measures in Detroit is there is very little left to cut. They have already slashed everything, including the size of the city. Trash doesn’t get picked up, police spread thin, some areas of the city don’t have access to electric light. There is no way around this, the city needs money to correct the financial instability, and they need a vast amount of it.
As proof, one needs only look to the 1975 fiscal crisis in New York City. After Gerald Ford famously told mayor Abe Beane to “Drop Dead,” the New York State government stepped in. The state along with the federal government infused cash and created the Municipal Assistance Corporation, which generated ten billion in bonds by the time of its dissolution. New York created a Renaissance that lasted two decades, including Rudy Giulliani’s giant investments in the police department.
Detroit needs a bailout. A reliable source of funding is required to invest in the “New Detroit” project, which will turn the city into an oasis of urban farming and renewable energy. Mayor Bing has to swallow his recalcitrance, take off his hat and put it in his hand. He should beg for investment. It might cost him the election, but this is what must be done.
If Detroit is going to get a bailout from the Feds, it certainly won’t be to fund “urban farming” and “renewable energy” boondoggles. But Washington, with the assistance of the state of Michigan, may have no choice but to step in if the EFM fails. There are 700,000 people living in near anarchic conditions now. You can’t simply move them all out and leave a shell of a city. Some effort must be made to save what’s left and help the city transition to a smaller, more manageable civic entity.
Detroit may have to trade sovereignty for survival, if it comes to that.