Far be it from your humble News Hitters to get up on a pulpit (the soapbox is more our style), but we’d like to share a little story with Detroit Mayor Kwame Kilpatrick. It’s a tale, you see, about a man who tried to build a house on a variety of foundations: sand, mud and finally rock. Not surprisingly, the first two houses collapsed. Only the house built on a solid foundation was sturdy enough to stand.
It’s a parable our young mayor would be wise to take note of as his attempts to balance Detroit’s wobbly budget continue.
It’s hard to say that Kilpatrick’s latest moves to fix the city’s financial woes are planted in reality, much less in bedrock. And that puts the administration at a real handicap when it comes to dealing with the true scope of Detroit’s budget problem.
Kilpatrick’s latest plan, delivered to City Council last week, includes $18 million in savings from more than 400 layoffs, $4 million in savings from transferring the Detroit Zoo to the Detroit Zoological Society and $13 million in revenue from increased personal property taxes. When added to previous deficit-reduction measures, all this, according to a press release issued by Kilpatrick’s office, will reduce Detroit’s budget “shortfall” — Kilpatrick spokesman Jamaine Dickens was careful to note that it’s not, technically, a deficit until after the fiscal year concludes at the end of June —to just $39 million.
To which we say, huh?
First off, Kilpatrick’s press release overlooks a little something — the accumulated $150 million deficit carried over from the two previous years that the mayor seems to never want to talk about. So, even if you believe the administration’s numbers — and that’s an incredibly big if —we’re currently looking at a shortfall of almost $190 million by the end of this fiscal year.
The administration’s avoidance of that $150 million debt is only part of the problem.
When Kilpatrick presented his budget to City Council back in the spring, former Detroit Auditor General Joe Harris originally identified $300 million worth of shaky revenue sources and questionable cost-cutting measures. The message was that Kilpatrick’s proposed budget was built on a foundation of fluff. And even after the council reworked the spending plan, it was still criticized for being, shall we say, less than reality-based.
And that continues to be the case.
City Council fiscal analyst Irvin Corley Jr. says that, with the city six months into the current fiscal year, Detroit — instead of making cutbacks necessary to balance its budget — has been spending about $15 million a month over budget. It’s an assessment the recently retired Harris has echoed.
“There are some savings going on,” Corley says, like approximately $30 million in earlier layoffs and a reduction in the city’s subsidy to the Detroit Department of Transportation. But, Corley says, that’s just a drop in the bucket.
The way he sees it, unless significant changes are forthcoming soon, the city is looking at a $150 million shortfall for this year. Add to that the $150 mil still owed from previous years — and which is supposed to be taken care of this year — and we’re back looking at a $300 million hole come July 1.
News Hits is edited by Curt Guyette. Contact the column at 313-202-8004 or [email protected]
