By James Brennan, Columnist
Published March 10, 2013
After decades of decline, Detroit, Flint and Pontiac all experienced chronic unemployment, drops in average household income and plummeting property values. The steady stream of people, businesses and government investment going to the suburbs over urban areas in the last 50 years has led to crises once unimaginable in what were Michigan’s greatest cities. The failure has become cyclical, as this loss in money and increase in poverty means more crime, worse schools, fewer services and no funds to fight these problems.
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With Republican Gov. Rick Snyder’s announcement last week, Detroit has become the latest city designated to receive an emergency financial manager. Emergency managers have one focus and one focus only: budgets. Their sole task is to take a municipality that is in massive debt and to bring it into solvency. In simpler terms, an emergency manager’s job is to balance the budget and do so as quickly as possible. The argument in favor of such action is that cities in fiscal crisis have displayed an inability to manage their own finances over an extended period and therefore need the state to intervene.
However, failing cities aren’t experiencing fiscal crises simply because they’re mismanaged by incompetent local officials. It’s not a coincidence that Detroit, Flint and Pontiac, Mich. are some of the state’s poorest areas and are hit hardest by the state’s struggling economy. Fewer jobs, lower average income and plummeting property values resulting in less tax revenue are the real causes of fiscal crises in cities. A balanced budget would be nice, but it won’t stimulate the economy. The state can raise fees and cut services all it wants to save money and eliminate deficits, but without a real economic recovery, cities will just continue their cycle of failure and fall into debt later on.
When an economy is sputtering, government — whether local, state or federal — must spend more money and cut taxes in order to increase growth. Spending directly gives income to people and businesses, while tax cuts allow for those already making money to spend and invest in larger doses. Both of these actions will result in heavier debt and deficits short term, but the resulting natural increases in employment, income and investment will mean higher tax revenues overall, and, in the long term, a balanced budget.
Emergency financial managers go directly against the interests of an economic recovery. Austerity measures will only harm the economy in the long run while improving fiscal solvency in the short term. Less spending means less income for government workers or contractors, while increased taxes take money out of consumers’ pockets. The reduced services and increased taxes result in residents paying more money and not getting much in return. This makes no sense economically and may contribute to higher crime and lower standards of living if money is taken away from police or infrastructure funding — the case in cities like Flint.
Detroit, Pontiac and Flint are struggling right now. With less money to attract business, improve education and fund key services, residents of these cities are losing opportunities to succeed every day. While government certainly isn’t a long-term job creator, public funding for certain aspects of life is simply non-negotiable. Schools need to provide students with an equal chance to go to college or trade school and get a job or start a business. Roads and public transportation must be maintained and improved so that low-income residents can get to work and improve their standing in life, while police need adequate funding and staffing to help prevent crime and improve a city’s standard of living.
No one is entitled to an easy life, to a job or to money. But no one should be condemned to a life of permanent hardship and struggle. The people of Detroit, Pontiac and Flint are no different than anyone else. They're no better and no worse. Given the same opportunities as the rest of us, residents of these struggling cities would succeed all the same. Slashing budgets and increasing fees and taxes will only harm already disadvantaged people further. As a state, we have to advocate for equal opportunity for anyone, anywhere. And in doing so, we must recognize those of us who aren’t given the same chances. Opportunities for growth and improvement won't be produced by a balanced budget, but rather by the hard work of committed people when given the chance to succeed.
James Brennan can be reached at email@example.com.