The Demise of Detroit & AFSCME’s Rejection of Reality

The wasteland of Detroit, Michigan may be reaching the end of its rope. Over the last decade, 25% of the city’s population has fled, leaving Detroit’s population count the lowest since 1910. Its municipal bonds are rated in the junk category and a municipal bankruptcy is not out of the question if it cannot straighten out its budget. Facing a massive deficit, the city is left with little recourse but to make severe cuts.

“We don’t have money in Detroit. … How are you taking more money out of it?” he asked. “The only way to get out of debt is to bring money into the city,” [Johnnie Drake of Detroit] said.

[Mayor] Bing proposes seeking concessions from unions and generating revenue, among other things, to net $200 million toward a $3.12-billion budget for 2011-12.

Council President Pro Tem Gary Brown said Detroit could cut 1,000 employees from the city’s work force to save money, and that he will not vote for any tax increases until he sees significant reductions in the number of workers. The city has 11,696 employees.

“We can’t get through this crisis without cutting heavily into our employee ranks,” Brown said.

Of course, AFSCME’s spokesman, attorney Richard Mack, Jr., offers what has become the standard union solution to budgetary problems: “Tax the Rich!” (or all those evil, greedy corporations). Unfortunately, for Mack, his solution (view it below) is part of the reason many of those corporations have already left–which is largely how Detroit found itself in its dire straits.

 

The problem in Detroit is that too few seem to want to admit what may be the only solution and that a bankruptcy. For now, even Governor Snyder has ruled it out an Emergency Fiscal Manager.

Please allow me translate: instead of dropping the hammer, the governor will allow Bing to bring in a two or three year deficit reduction plan to treasurer Andy Dillon in addition to the one year plan the city is operating under right now. It’s a way to buy time and see if there is any way to negotiate a soft landing. Of course there are those who say that is not going to happen, and an EFM was needed five years ago. But with union protests bringing thousands of workers on the Capitol lawn every other week, the governor clearly isn’t interested in further fanning the flames.

Now this does not mean the unions are off the hook. Bing needs leverage to get the kinds of major and gut wrenching cuts necessary to wrestle his budget to the ground. $200 million is tough to come by for growing cities; well nigh impossible for a city in Detroit’s condition. Bing can keep the club of an EFM if negotiations don’t go his way. It’s certainly not out of the realm for him to decide to tell the governor an EFM is the only answer. No doubt about it, this will be an interesting spring and summer in the city of Detroit. The clock is ticking on a time bomb. We are left to watch and wonder whether negotiations will diffuse that bomb.

Obviously, if prolonging the inevitable is something AFSCME could do, it would. However, by ignoring reality, as Democrats seem to be doing throughout the nation, they jeopardize the city’s entire future.

Photo Credit: Bob Jagendorf

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“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776

X-posted.

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