Detroit Mayor Kwame Kilpatrick proposed a citywide two-percent tax on fast food last week as a part of his plan to pay the city’s $300-million budget shortfall. This tax is inherently regressive; it would primarily affect the poor, who must often resort to fast food, and it would fail to address the deeper economic troubles besetting Detroit. A recent study found that Detroit already places the 10th-largest tax burden on its residents out of the nation’s largest cities. Further taxation would only drive more residents and businesses out of Detroit and discourage new investment, impeding economic recovery. As the city struggles to fund its current deficit, it must find alternative ways to raise money and cut costs without increasing taxes on its own residents.
The city of Detroit has faced serious financial troubles throughout the past few years, and the coming fiscal year is no exception. City employees will see severe pay and benefit reductions, and city services face drastic cuts. Most of Detroit’s museums and cultural centers, including the Detroit Zoo, have lost their city subsidies, and the Belle Isle Aquarium was closed this year.
Because additional taxation would not be fair to Detroit’s residents or sufficient to remedy its budget woes, the city and state governments should explore alternative measures to fix the budget deficit. Although Michigan itself is strapped for money, any aid that could be earmarked for Detroit would benefit the entire state. A growing, successful Detroit would improve Michigan’s image as well as its economic health. Additionally, neighboring suburbs could be important sources of support for the ailing city. Although voters rejected a regional arts millage in 2000, other efforts could be made to encourage regional cooperation. Oakland County is one of the richest counties in the nation, and there are other affluent communities in nearby parts of Wayne and Washtenaw counties. The wealthier residents of these areas enjoy Detroit’s historical areas, athletic events and fine-arts venues. A modest tax increase on these urban attractions would generate more revenue without taking more money from the city’s residents.
Another possible way to rectify Detroit’s financial woes would be a reform of its internal institutions. Due to population losses over the past several decades, Detroit’s city government is adequate for a city nearly twice its current population, and out of the country’s 15 largest cities, Detroit currently ranks fourth in city employees per thousand residents. A careful “right-sizing” of the city’s workforce and a greater emphasis on efficient spending by the city government could bring Detroit closer to an appropriately sized city government that reflects its population, its tax burden and its economic situation.
Such a set of solutions will require a more fiscally responsible mayor — one who can set an example of efficient and responsible spending for the rest of the city. Recent reports of Kilpatrick’s reckless use of city funds are disheartening, and reform of the city government will be difficult without a leader who can exercise the same restraint the city must demonstrate. At a time when Detroit’s government needs to tighten its belt, the city will need a leader who is capable of tightening his.