Posted on 02/02/2005 8:25:41 AM PST by Pikamax
Shrinking, Detroit Faces Fiscal Nightmare By JODI WILGOREN
ETROIT, Jan. 29 - In the decade after he finished law school, Dan Varner watched with mounting exasperation as his black, middle-class peers defected from Detroit, beloved city of his birth.
He was the relentless city booster telling college-bound teenagers to come home after graduation, the one urging far-flung friends to move here, the man always talking about rebuilding the city while others abandoned it.
Then, one day, Mr. Varner said he realized "there was really no one to have dinner with." He said he "could count on one hand in the four blocks around me the number of men my age who had families." Enough became enough one spring day when he drove his children home past a band of teenage boys chanting profanity.
"As a dad and a husband, you have an obligation to try to provide the best life possible," said Mr. Varner, 35, who in August moved his family to Ypsilanti Township, 45 minutes away. "That was just something we couldn't find in Detroit."
The Varners are emblematic of the exodus that is plunging Detroit's government and school system into a fiscal nightmare, resulting in not just the slashing of staff and services, but also, for the first time, a fundamental right-sizing for a new, shrunken reality. The 139-square-mile Motor City now has a population of 911,000, less than half its 1950's peak.
With the city facing a $389 million shortfall over three years and the threat of receivership, Mayor Kwame M. Kilpatrick announced this month that Detroit would soon lay off 686 people and eliminate 237 vacant jobs, cut employees' pay 10 percent across the board, end overnight bus service and close the aquarium. That is just a start, as consultants consider cutting departments - like cultural affairs and the zoo, and health, transit and street lighting - and ponder new taxes on everything from alcohol to vacant land.
In the school district, which must submit to the state by Friday a deficit elimination plan in order to borrow the money it needs to operate, the chief executive, Kenneth Burnley, sent pink slips to 372 teachers before Christmas and plans to shutter 40 schools this summer. That sounds like a lot until it is laid against projections of enrollment plummeting to 100,000 by 2008, half what it was in 1999, which would result in the firing of 5,400 of 21,000 employees and closing 110 of 252 schools.
The twin crises come as Mayor Kilpatrick, in the final year of his first term, is engulfed in a controversy over the city's two-year, $24,995 lease of a sport utility vehicle for his wife and three children. Dr. Burnley is also ensnared in an ugly fight after voters in November rejected the state-appointed board that hired him in favor of returning to an elected board this month. The board voted last week not to renew Dr. Burnley's contract, which expires June 30, but he remains a candidate for the one-year interim chief executive slot during the board transition.
So a dour mood has descended over a city that has been seeking a renaissance for more than a generation. The words people use to describe the situation are "cataclysmic," "debilitating," "monumental," "dire" and "grave."
"To the extent bad politics continue to swamp good economics, I see no turnaround imminent," said David Littman, chief economist at Comerica Bank, who sat on a task force on city finances in 1975 and says Detroit's woes follow decades of denial about downsizing, privatization and competition. "It does gravitate to a graveyard spiral."
Causes of the crisis are complex, and, unsurprisingly, much debated, but the story starts with some staggering numbers. Having lost one million residents in a half century, Detroit is expected to see its population drop by 50,000 more in the next five years; 15,168 business have departed since 1972. New loft developments credited with revitalizing downtown are mainly filled with empty-nesters, not the building blocks of a healthy community; white flight has become bright flight, with families and people earning more than $50,000 a year leading the way out of town.
But the city's payroll still has the 18,000 employees of a decade ago (after spiking to 21,000 in the late 1990's), with 1.4 administrative employees for every 1,000 residents, far higher than the 1.0 median for major cities. Detroit, with antiquated technology like a 29-year-old payroll system, also spends more than most other cities on policing ($377 per capita, compared with a median of $221), garbage ($100 per capita versus Chicago's $62 and Milwaukee's $52) and other services.
Flight is even more furious from the public schools, which have lost 33,000 students since 1998-9, enough to fill 65 elementary schools (21 have closed). Competition that was supposed to promote improvement has instead hastened the district's collapse. Of the 9,300 students who did not return last fall, 3,400 went to charter schools and 1,300 to neighboring suburbs that recruit Detroit residents.
Those left are the hardest and most expensive to educate. One in seven Detroit students is in special education, and 72 percent are poor enough to qualify for free lunches, up from 61 percent four years ago.
"It's forced them to make cuts that would just make any other school district in the country cringe," said Michael Casserly, executive director of the Council of Great City Schools, which is based in Washington and works to promote urban education.
Mr. Casserly said Detroit was in the worst crisis of any large school district in the nation.
Making matters worse, the state has tried to plug its own shortfall by cutting payments to local governments. Cities got 3 percent less last year after a 3.5 percent cut the year before, and schools now get $124.45 less per student than they did in 2002, a loss of $19 million over two years for Detroit.
The still-stagnant economy here - Detroit's unemployment rate is 14 percent, compared with 7.3 percent statewide and 5.4 percent nationally - punishes City Hall because the city relies more on income taxes than the property taxes that finance most other cities. The struggle to attract businesses and residents has been compounded by Detroit's tax burden, which is 5.5 times that of the average Michigan municipality.
But the city and school district could be out of money by the time the economy rebounds or the Legislature changes tax and financing formulas. So officials are negotiating with unions on buyouts and reductions in benefits, and wandering City Hall trying to consolidate jobs. Soon, business and civic leaders suggest, the city will hand street lights off to a local utility, push public health back to the county and try to create an independent transit authority. Among the more farfetched options is a head tax - $252 per resident.
"This is the most public conversation we've had about the finances or the financial health of the city of Detroit, ever, in the history of this town," said Mayor Kilpatrick, who brought in municipal finance experts from across the country for a two-day forum this month. "What we've been doing is looking at each operation in city government and asking a basic question: Is this a business that most cities are in? Is this a business that we should be in? And if we should, how can we afford to stay in it?"
But the abstract discussion about whether a city should run buses does not soothe those who ride them in a city where one-third of the residents do not have cars.
"I'm so ashamed they would consider such an inhumane thing," Annette Marshall, who has lived on the city's east side for 62 of her 68 years, said about the plan to eliminate 8 of Detroit's 52 bus routes and all bus service from midnight to 5 a.m. and after 8 p.m. Sundays. "Without that, you won't have your city anymore."
Arbutus Garwood, 61, said her $14-an-hour wage could not cover $25 cab rides back and forth to some late-night shifts as a janitor at the MGM Grand casino.
"When you can't get to and from work there's a lot of things that break down," she said. "I have a house. Grandchildren in college I help pay for. I know the city's in trouble, and they have to cut somewhere, but not the buses. I need them."
The imminent school closings, too, hit a community in its heart.
Andre Davis, 42, a city police officer, graduated from Detroit public schools and assumed that his 9-year-old twins would do the same. But "if the school closings continue, I'm leaving the city," he said.
Mr. Davis continued: "I'm not bashing Detroit, but I want more for my kids. It's embarrassing on a national scale."
The financial unraveling comes despite measurable improvements. Test scores are up and class sizes are down since Dr. Burnley's arrival in 2000. He has tripled the size of the security force, added 400 full-day kindergarten classrooms and enrolled 3,000 children in full-day preschool. But, still, people flee.
"There's actually an organized effort to discount everything you do," Dr. Burnley said of outrage over the state-appointed board. "Do you work on improving the public schools or do you get consumed by 'Oh, you took away my right to vote.' We've been dealing with that every day since we got here."
At a meeting last week of Detroit Renaissance, a group of business leaders founded in 1970, Mayor Kilpatrick, whose fancy suits and hip-hop persona have been a flashpoint for controversy since he took office, was greeted as though at a funeral: "How you holding up?" "You O.K.?" "Anything I can do?"
He brags about the 22 restaurants that have opened downtown in the past two years, the 7,400 new housing units coming in the next three, Super Bowl 2006 right here at Ford Field. But the 34-year-old mayor knows that his legacy will be slashing city government - or, worse, failing to.
"We've been a black eye on the landscape of America for too long," he said in an interview. "I don't want that stigma attached to me and my kids anymore."
A few weeks ago he began working out with weights for the first time since he played college football. "I'm getting in fighting shape," he said.
Does Michael Moore get credit for advertising Detroit and surrounds as the worst place on earth to live and work.
Embarrassing on a statewide scale as well.
That story practically brought tears to my eyes.
I think they call it 'rap'
I wonder if city government has been dominated by one political party or the other, and if so, which party that would be...
Or will it be RoboCop?
They just need to send in RoboCop.
Its just so sad, maybe we should just nuke the city to stop the embarrassment. Oh well, I guess moving out would be the only sane thing to do after all.
"Or will it be RoboCop?"
Damnit! You beat me to it by a single post!!
#7- I know that was sarcasm, I know sarcasm when I hear it...
Pittsburgh was saved by massive urban renewal. Detroit can be saved if anybody is interested.
On the bright side, I'll bet the traffic situation has really improved. With fewer people comes fewer cars.
Traffic jams must be almost non-existent.
PNC Park rules!
Alternate headline: "The Blueing of Detroit." Whether it's because of white-flight or bright-flight, isn't the two pronged solution to aggressively tackle crime and fix the school system?
Not to worry, Syria will annex Detroit soon enough.
bigger government programs ain't going to save Detroit
Ever since terrorist financing has been seized, cash has been tight up in the motor city.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.