In recent months, as the extent of Detroit’s deepening budget crisis has become more and more apparent, the City Council’s primary response has been to utter the word “don’t.” As in, don’t close Belle Isle Aquarium, don’t curtail bus service, don’t lay off any more workers this fiscal year.
It doesn’t help that seven of the eight current council members are running for re-election. The eighth, Sharon McPhail, is challenging Mayor Kwame Kilpatrick. Everyone on council, it seems, is playing to constituencies that want.
But reality is crashing down hard and fast. For starters, there’s a $93 million deficit for the 2003-2004 fiscal year that, by law, must be paid by July 1. There’s also a $60 to $65 million projected deficit for this fiscal year that will have to be addressed at some point, although no one seems to be willing to talk about that particular problem at this point. Then there’s a whopping $230 million in cuts that have to be made to produce a balanced budget for the next fiscal year, also by July 1. For those of you without calculators handy, that’s about $386 million. Even in a city with a general fund budget of $1.59 billion, $386 million is hardly chump change.
Broadly speaking, the council becomes involved in the budget process after the Kilpatrick administration presents its spending plan for the coming fiscal year on April 12. The council holds budget hearings, gets to add and subtract items from the budget, but when all the math is done, it has to balance out. Then the budget goes back to Kilpatrick for his signature. The mayor can reject council amendments, but the council can reinstate rejected amendments with a two-thirds majority vote — that’s six of the council’s eight members. However, just because the council allocates money for a specific department or institution doesn’t mean the administration has to spend the money on it, as determined in a 2003 decision in a lawsuit in which the council took the administration to court over the closure of the Belle Isle Zoo. The courts upheld the administration’s decision to close the zoo, even though council had allocated budget funds for it.
After the council receives the budget from the administration, there normally aren’t a lot of negotiations going on behind the scenes, says Irvin Corley Jr., head of the council’s fiscal analysis division. Corley says that in most years, the council’s changes to the administration’s spending have been less than 1 percent.
But in recent years, there have been more changes — closer to 9 percent, Corley says. The council’s involvement doesn’t normally begin until much later in the game, but this year, Corley says, it has gotten involved in the process early because of the fiscal crisis.
Until now, the measures taken in an attempt to begin mopping up the flood of red ink have come about as a result of executive order, or administrative decisions. The council, mostly, has only been able to sit on the sidelines, opposing the moves with resolutions that have no real effect. The council, however, can no longer just keep saying “don’t.”
For the time being, though, the new refrain is, “We don’t know.”
What’s not known, several council members claim, are the kind of budget details they say are necessary to make informed decisions about where to cut. Council President Maryann Mahaffey says the council is being presented with “piecemeal” cuts, and lacks a view of the big picture. Members say they’ve asked for information on the administration’s overall deficit reduction plan, to no avail. Likewise with information about the actual performance of departments, compared to the amount of revenue projected in the current year’s budget — information council members say is crucial in determining which departments should be pruned.
“It makes it really hard to track the flow of information, it makes it hard to put all the puzzle pieces together,” says Council President Pro Tem Ken Cockrel Jr.
Nonetheless, the situation is dire, and cuts have to be made — lots of them.
So, what would council do to balance the books? We asked each member to give us some specifics. Most council members agree that the city has too many employees, but feel it’s important to retain essential services: transportation, fire, police.
For whatever reason, this much is clear: When Metro Times went asking council members their suggestions for balancing the budget, the responses are more vapor than concrete, with very few hard numbers.
Councilmember Alonzo Bates’ response is fairly typical, offering only a vague outline of how to attack the budget problem.
“I don’t think any of it ought to be left whole,” Bates says. “It all ought to feel the pain. Including the council staff.”
Bates says he can’t suggest any one department that should be cut first.
“Start anywhere,” Bates says. “Look at the whole budget, just start making cuts, just go with a percentage. There’s over $300 million deficit, so everything has to be hit. Somebody has to take the pain. How else can we do it? We have the budget, we have to balance the budget, we have to make cuts.”
Councilmember Barbara-Rose Collins is more specific, saying personnel cuts should be geared toward eliminating or reducing the higher end of the workforce, but she isn’t clear about which specific positions should be cut, or how much could be saved.
“I thought we should eliminate the deputy directors. We’re top-heavy in management,” Collins says. “We need to cut some of that top management off.”
Collins also says some perks, but not all, should be eliminated: “I feel we should stop stipends for cars for nonelected officials.”
Collins says she supports the mayor’s proposed 10 percent pay cut — for the mayor, all appointees and non-union workers — but feels that higher-paid city employees should feel the pinch first.
“We should not cut 10 percent across board. We should stagger it. People making $140,000 get cut 20 percent, for people making under $25,000 cut 5 percent,” Collins says.
McPhail also targets top management positions.
“There are some departments where the managers are managing the managers,” McPhail says.
She doesn’t know how much money could be saved by cutting management, but says it’s easy to figure out, in theory.
“If you’ve got 25 managers, cut it to five,” she says. “You lose 20, at an average of $60-80,000 apiece, plus 70 percent for benefits, and then you see where you are there.”
McPhail, however, is speaking only in the abstract, and didn’t offer specific management positions she says can be cut, and how much money would be saved.
Mahaffey says she’d prefer to start eliminating the budget deficits by beefing up revenues rather than by cutting services.
“You don’t cut revenue sources like inspectors and people who collect revenue,” Mahaffey says.
Mahaffey’s not sure how much revenue could be generated through more effective revenue collection. She admits that increasing revenue would only compensate for a small part of the city’s deficits, but says it’s hard to say because the council hasn’t been provided with accurate information about the current year’s deficit.
Councilmember Alberta Tinsley-Talabi says she knows that the city will have to make cuts, but also thinks some areas of revenue could be increased to meet the city’s budget shortfall.
“We should always look at increasing revenue. I know there were a number of studies done on ways we could increase revenues here in the city, and I am going to be looking at those closely to see which ones make sense,” Tinsley-Talabi says.
One underutilized area of revenue, Tinsley-Talabi says, is Detroit City Airport.
“When I see every other city of comparable size that has an airport, it’s being run as a moneymaker,” Tinsley-Talabi says. “I’ve seen the Chicago airport expand beyond what anyone thought it could be.”
Tinsley-Talabi says she doesn’t have any figures or studies that would indicate how much revenue a revitalized City Airport could bring in, or how much it would cost to expand.
“Yes, it would be a cost initially, but it could be a tremendous asset,” Tinsley-Talabi says. “It’s unfortunate that Detroit has what’s really a jewel sitting there, and it is being minimized.”
After this year’s deficits are taken care of, Tinsley-Talabi says, the city’s government needs to set priorities for the future of Detroit. She thinks the city could save money by combining or eliminating departments with redundant functions and making the city a more attractive environment for small businesses.
She also advocates a beer tax at Detroit’s sports arenas.
“Additional taxes on cups of beer that are sold that could go to help city of Detroit,” Tinsley-Talabi says.
That’s a decision that would have to be made by the state Legislature.
“If you have a stadium that holds, in the case of the Lions’ stadium, 60,000 people, and more than half of them are drinking beer, if [the tax] were 50 cents you could tack that on to 30,000 people — the idea should not be sacrosanct,” Tinsley-Talabi says. “People won’t even entertain the idea due to there being such a strong lobby.”
The city’s core services need to be re-evaluated, says Ken Cockrel, and eliminating or consolidating city functions could help balance the books.
“I’m not able to tell you how much that would save, eliminating certain departments or consolidating certain departments, but one thing that comes to mind is the cultural affairs department,” Cockrel says. “Is that a department that could be downsized, or maybe eliminated?”
The city’s Department of Culture, Arts and Tourism was budgeted last year with $1,333,616 in expenditures and $1,040,653 in revenues, requiring a subsidy of around $292,000.
“To be honest with you, it sounds good, but I’m not real clear on what that department does,” Cockrel says. “I know some other cities don’t have that department. They have a division within mayor’s office that does that. Could we eliminate that department and put that in the mayor’s office?”
Councilmember JoAnn Watson, who didn’t return phone calls by Metro Times’ deadline, has released statements supporting the mayor’s proposed 10 percent pay cut and advocating a rollback in city salaries over $100,000 a year.
According to a Feb. 18 release from Watson’s office, the city can save $3.4 million by reducing all salaries in excess of $100,000 to $100,000. Watson also advocates freezing hiring, travel and eliminating city-funded cell phones, but hasn’t provided specific figures about how much money that would save.
Nothing short of a citywide restructuring, says Councilmember Sheila Cockrel, will fix Detroit’s fiscal crisis.
“We need to determine the actual number of city employees needed to provide services and the best benefit structure and the best wage structure,” Cockrel says. “That means cuts in some services, and some services the city currently provides it won’t provide.
“Everything is on the table. Everything needs to be reviewed.”Nancy Kaffer is a staff writer for Metro Times. Send comments to [email protected]