Is There Detroit After Bankruptcy?

Why shock therapy won’t reverse the Motor City’s decline.

Ryan Felton August 12, 2013

2008 view from a penthouse in the Broderick Tower, looking at the downtown skyline.Today, the building has been converted to condos and has a wait list for occupancy. (Photo by Sean Doerr)

Detroit — Sandy Mills, 59, has been wait­ing 15 min­utes for her bus to arrive, and she’s tired of it all.

If recent history of municipal bankruptcy is any guide, Detroit's short-term future is bleak. When Vallejo, Calif., filed for bankruptcy in 2008, things got worse, fast.

Detroit’s bus sys­tem is noto­ri­ous. Mills says she once camped out for two-and-a-half hours.

It’s hor­ri­ble,” Mills says. The only time [the bus­es] are ser­viced prop­er­ly is if they’re bro­ken down.” When she worked at the Detroit Free Press, she felt so unsafe due to vio­lence along her route that she start­ed shelling out for a taxi.

Mills, born and raised in Detroit, is on her way back to her home on the city’s north­west side after stop­ping at a down­town temp office. The job she hopes to land pays $10 an hour — 40 per­cent less than what she earned as a cus­tomer ser­vice rep at the Free Press before being laid off in 2008. Since then, she’s found only part-time tem­po­rary work and has been forced to rely on unem­ploy­ment assis­tance time and again.

If she gets a steady job and man­ages to set aside some sav­ings, she has one plan in mind: Get out. Not just out of Detroit; out of Michi­gan entirely.

I’m done,” she says. I’m total­ly done. Nothing’s working.”

Pin­point­ing a sin­gle source for the decline of what was once the nation’s fourth-largest city is a fool’s game. Detroit’s depop­u­la­tion and long-term debt oblig­a­tion have tan­gled roots: long­stand­ing mis­man­age­ment and cor­rup­tion, sub­ur­ban sprawl enabled by America’s high­way boom, increased crime due to police cut­backs, the 1943 and 1967 riots spurred by racial ten­sions and a racist police depart­ment, and munic­i­pal­i­ties across the metro area that scorn region­al planning.

Top that off with the decline of the auto indus­try and Michigan’s deflat­ing econ­o­my through­out the 2000s, which spurred the state to renege on a rev­enue-shar­ing deal with the city, cost­ing Detroit an esti­mat­ed $700 mil­lion, and it is eas­i­er to under­stand why Detroit filed the largest munic­i­pal bank­rupt­cy in U.S. his­to­ry this July.

We are final­ly at a point where we sim­ply can’t kick the can down the road any fur­ther,” Detroit Emer­gency Man­ag­er Kevyn Orr told the media a day after he ini­ti­at­ed the process to seek Chap­ter 9 protection.

Orr, a Wash­ing­ton, D.C. bank­rupt­cy lawyer, was appoint­ed the city’s emer­gency man­ag­er in March by Gov. Rick Sny­der ®. He’s offer­ing Detroit’s unse­cured cred­i­tors a dime on the dol­lar, propos­ing to cut munic­i­pal employee’s pen­sions and ben­e­fits, and plans to pri­va­tize entire city departments.

Detroit’s cof­fers are bare. Its longterm debt load, Orr says, hov­ers any­where between $18 bil­lion and $20 bil­lion, and oper­a­tion deficits have been unchanged for years. In addi­tion, since 2000, the city’s pop­u­la­tion has declined by about 200,000, to 687,000, and inter­im cen­sus esti­mates indi­cate that peo­ple con­tin­ue to flee. Dur­ing the same peri­od, bud­get short­falls forced cuts in city ser­vices. The police force, for instance, shrank by rough­ly 35 per­cent, from 4,000 to 2,600 officers.

But down the road from where Mills sits, in bustling Cam­pus Mar­tius Park, young employ­ees of down­town Detroit’s biggest employ­ers are hav­ing a great time at the feel-good Live Down­town Games,” which include obsta­cle cours­es, table ten­nis and vol­ley­ball. The live­ly scene — com­plete with an arti­fi­cial beach, a tiki bar and pop-up food carts — is part of a pro­gram that offers employ­ees finan­cial incen­tives to shack up in a down­town home or loft.

This area is buzzing, and the down­town and mid­town invest­ment booms show no signs of slow­ing. A new $650 mil­lion sports are­na and enter­tain­ment dis­trict has talk­ing heads chirp­ing about a Detroit revival. Rental and com­mer­cial space are near­ing 100 per­cent occu­pan­cy as peo­ple from sur­round­ing sub­urbs flood into this 7.2‑square-mile slice of Detroit’s sprawl­ing land­scape. For some, sum­mer 2013 is dawn­ing in a rosy haze of optimism.

This is Detroit today: a city of paradoxes.

Exact­ly what is in store for Detroit won’t be known for weeks, as the bank­rupt­cy case wends its way through a court that must first deter­mine if Detroit is even eli­gi­ble for protection.

To most spec­ta­tors of the city’s unrav­el­ing — res­i­dents and out­side observers alike — an emer­gency man­ag­er, and now bank­rupt­cy, is the dose of harsh real­i­ty Detroit needs. After decades of mis­man­age­ment and missed oppor­tu­ni­ties, restor­ing fis­cal order has been deemed the ulti­mate, and only, pre­rog­a­tive. Fix the debt and move on.

For some of the city’s cor­po­rate lead­ers, bank­rupt­cy is even a wel­come devel­op­ment. For exam­ple, as Quick­en Loans founder Dan Gilbert con­tin­ues his aggres­sive real-estate buy­ing spree down­town, he’s preached a mes­sage of let’s‑get-it-over-with-and-blast-through-to-the-other-side.

I think [the bank­rupt­cy will] be rel­a­tive­ly short,” Gilbert told the Detroit News in June. It’s been hang­ing over us for years. Now we’ll final­ly get key prob­lems addressed.”

Straight­en­ing out the city’s finances is vital in the short term to avoid exac­er­bat­ing cur­rent trends such as unpaid fur­loughs for city employ­ees and wage cuts, some as much as 20 per­cent since 2010. And per­haps fis­cal aus­ter­i­ty is the only polit­i­cal­ly palat­able path.

But bank­rupt­cy is anoth­er Band-Aid on prob­lems that have per­sist­ed for years. The much-tout­ed solu­tion has only a slim chance of revers­ing the city’s decades-long decline. Oth­er options do exist that could rein in finan­cial prob­lems and allow the region to grow — but they’ve nev­er been put on the table. A region­al author­i­ty with a broad­er tax base or the kind of New Deal-style jobs pro­gram that Oba­ma and some in Con­gress have tout­ed could pro­vide an influx of cash to buoy Detroit.

For now, the bank­rupt­cy exper­i­ment will play out. And it won’t be the young peo­ple liv­ing and work­ing in Detroit’s gen­tri­fy­ing mid­town and down­town who will be affect­ed. It’ll be the res­i­dents of the evis­cer­at­ed neigh­bor­hoods, of whom 80 per­cent are black, and the thou­sands of cur­rent and retired city employ­ees — those still resid­ing in Detroit, some in the sur­round­ing sub­urbs; mid­dle-aged and old­er — who punched the clock day-in and day-out.

Unprece­dent­ed powers 

Michigan’s unique emer­gency man­ag­er leg­is­la­tion was estab­lished in 1990. Under the law, fis­cal turn­around artists — pre­vi­ous­ly called emer­gency finan­cial man­agers” — could be appoint­ed by the state to restruc­ture a city in dire finan­cial straits. Only an emer­gency man­ag­er could peti­tion to bring a munic­i­pal­i­ty into bankruptcy.

The orig­i­nal emer­gency man­ag­er leg­is­la­tion was wide­ly crit­i­cized as tooth­less leg­is­la­tion that didn’t empow­er the appointees enough. After Sny­der won the gov­er­nor­ship, one of his first actions was sign­ing Pub­lic Act 4 of 2011, giv­ing emer­gency man­agers the added author­i­ty to mod­i­fy col­lec­tive bar­gain­ing agree­ments with pub­lic-sec­tor unions.

Chris Sav­age, pro­pri­etor of the Ann Arbor, Mich.-based Eclec​tablog​.com, wrote in The Nation that the law grants emer­gency man­agers unprece­dent­ed pow­ers: Under PA 4, [emer­gency man­agers] can exer­cise any pow­er or author­i­ty of any offi­cer, employ­ee, depart­ment, board, com­mis­sion or oth­er sim­i­lar enti­ty of the local gov­ern­ment whether elect­ed or appointed.’ ”

A ref­er­en­dum to repeal PA 4 was approved by vot­ers in the Novem­ber 2012 elec­tion. But the Repub­li­can-con­trolled leg­is­la­ture quick­ly craft­ed and approved a bill that was vir­tu­al­ly iden­ti­cal but exempt from pop­u­lar control.

Some say it’s about time the state got involved in address­ing the finan­cial prob­lems of Detroit, a long­time Demo­c­ra­t­ic strong­hold. Eric Lupher, local affairs direc­tor for Cit­i­zens Research Coun­cil, a non­par­ti­san pol­i­cy research group, con­tends that Detroit has qual­i­fied for an emer­gency man­ag­er under the 1990 law for years. The state has cho­sen, most­ly for polit­i­cal rea­sons, not to get involved,” he says. The state has some cul­pa­bil­i­ty in this, let­ting things get worse and worse.” Lupher’s men­tion of polit­i­cal rea­sons” refers to for­mer Gov. Jen­nifer Granholm (D), who avoid­ed dis­com­fit­ing Detroit Democ­rats while she was in office from 2003 – 2011, as city con­di­tions worsened.

Shock Ther­a­py

Two years ago, Sny­der declared bank­rupt­cy to be a non-option for cities in Michi­gan under his watch. Today, he says it’s Detroit’s only viable” option. This is the time to say enough is enough in terms of the down­ward decline of Detroit,” Sny­der told the media a day after the July 18 Chap­ter 9 filing.

But if recent his­to­ry of munic­i­pal bank­rupt­cies is any guide, the city’s short-term future is bleak. When Valle­jo, Calif. filed for bank­rupt­cy in 2008 after accu­mu­lat­ing a $16 mil­lion oper­at­ing bud­get deficit, things got worse, fast. Road main­te­nance was cut by 90 per­cent. Fire and police depart­ment staffs were cut in half. The num­ber of police offi­cers fell from 155 to 90, and dis­patch­ers from 24 to 14. Response times some­times stretched for hours. Bloomberg reports that Valle­jo exit­ed bank­rupt­cy in 2011 with a skele­tal work­force … and a surge in pros­ti­tu­tion, while for­feit­ing its abil­i­ty to issue debt for five years.”

Robert Brooks, finance pro­fes­sor at the Uni­ver­si­ty of Alaba­ma, told Reuters in July that a com­pa­ny in bank­rupt­cy and a city in Chap­ter 9 face sim­i­lar chal­lenges: Like any com­pa­ny, you have to grow, or you are going to die.” A study from Stan­dard & Poor’s showed Valle­jo gen­er­at­ed $34 mil­lion in sav­ings in bank­rupt­cy court, but the sav­ings were almost entire­ly negat­ed by expens­es relat­ed to the bank­rupt­cy itself. Now two years after emerg­ing from Chap­ter 9, it has yet to bal­ance its bud­get, and the police force is rough­ly half its pre­vi­ous size,” Reuters reports. Valle­jo remains shut out of the munic­i­pal bond mar­ket and can­not raise mon­ey to address much need­ed infra­struc­ture repairs.”

John Pot­tow, a pro­fes­sor at Uni­ver­si­ty of Michi­gan Law School and a bank­rupt­cy expert, says Detroit’s bank­rupt­cy will con­tin­ue a trend [of steep decline in basic ser­vices] that began years ago.”

Trav­el out from the city’s core — just half a mile from some spots of down­town— and you find jaw-drop­ping blight and near-vacant blocks. Some city parks are blan­ket­ed with veg­e­ta­tion. A vol­un­teer group call­ing itself the Mow­er Gang has begun main­tain­ing some patch­es where neigh­bor­hood res­i­dents haven’t addressed the tall weeds themselves.

If Detroit is found to be eli­gi­ble for bank­rupt­cy, police cuts are also a pos­si­bil­i­ty, which would only slow response times that cur­rent­ly aver­age 58 min­utes. In 2012 the city’s mur­der count rose to 386, the high­est in two decades. With 54.6 mur­ders for every 100,000 res­i­dents, Detroit has the sec­ond-high­est rate of any U.S. city. (Flint, Mich. is first.)

Orr has a long-term plan to restore pub­lic ser­vices. After sus­pend­ing pay­ments to unse­cured cred­i­tors in June, he hopes to recoup $1.25 bil­lion through cred­i­tor nego­ti­a­tions that can rein­vest­ed pub­lic ser­vices over 10 years. Con­sid­er­ing, how­ev­er, that esti­mates peg the legal costs of a bank­rupt­cy at $100 mil­lion, and, accord­ing to Orr, it will take more than $80 mil­lion to fix the city’s infor­ma­tion tech­nol­o­gy depart­ment — includ­ing the tax col­lec­tion sys­tem — the math starts to get hazy.

Pot­tow says the only ways Detroit can address its oper­at­ing bud­get and defi­cient ser­vices is by rais­ing tax­es or cut­ting expenses.

For now, it can’t raise tax­es; the city has already reached the statu­to­ry lim­it imposed by the state. And as Gov­ern­ing Mag­a­zine points out, even if state leg­is­la­tors autho­rize high­er tax­es, it’s doubt­ful whether res­i­dents could afford to pay them. Near­ly 40 per­cent of Detroi­ters live in pover­ty, more than 2.5 times the nation­al rate, and there’s also a sense that high­er tax­es — espe­cial­ly giv­en the poor qual­i­ty of city ser­vices— would fur­ther deter peo­ple from mov­ing to the city,” Gov­ern­ing writes. Orr says rais­ing new rev­enue is not a viable option.’ Attor­neys for the city also say sell­ing off city assets won’t do much to plug Detroit’s fis­cal hole.”

That leaves cut­ting expens­es, and city ser­vices are a like­ly tar­get. Orr is already in the process of trans­fer­ring trash pick­up and elec­tric­i­ty to the pri­vate sec­tor. He’s pro­posed spin­ning off the city’s water and sewage depart­ment into a region­al author­i­ty. He could also free up mil­lions more if he finds a com­pa­ny will­ing to take over oper­a­tion of the city’s bus services.

Pri­va­tiz­ing bus oper­a­tions would have one imme­di­ate impact: high­er bus fares for res­i­dents depen­dent on the sys­tem as their pri­ma­ry mode of trans­porta­tion. Orr says in his June 14 restruc­tur­ing pro­pos­al to cred­i­tors that Detroit’s bus fares are rel­a­tive­ly low” and, sug­gests hik­ing them in the future to gen­er­ate rev­enue. Once more, that’s where that Detroit para­dox emerges: the more severe the cuts, the greater the impact on res­i­dents, espe­cial­ly for those who sim­ply have no oth­er option but to rely on city ser­vices. Detroit’s name is syn­ony­mous with the auto­mo­bile, yet 60,000 of the city’s 349,000 house­holds have no access to a vehicle.

Lupher, of Cit­i­zens Research Coun­cil, thinks that while pri­va­ti­za­tion would cause Detroit to lose some abil­i­ty to han­dle things inter­nal­ly,” it could save ser­vices that would oth­er­wise be cut entirely.

But pri­va­ti­za­tion rais­es a num­ber of con­cerns, says Bren­dan Fis­ch­er, gen­er­al coun­sel with the Cen­ter for Media and Democ­ra­cy. If you’re sell­ing off pub­lic ser­vices to for-prof­it com­pa­nies, the pri­ma­ry con­cern [becomes] max­i­miz­ing prof­its rather than serv­ing the public’s inter­ests,” he says. In many cas­es, it results in low­er-qual­i­ty ser­vices [and] high­er fees.”

Detroit’s pub­lic schools pro­vide an exam­ple of pri­va­ti­za­tion already at work. In 2011, Sny­der autho­rized the cre­ation of a state-run dis­trict, the Edu­ca­tion­al Achieve­ment Author­i­ty (EAA), to over­see 15 of the city’s low­est-per­form­ing pub­lic schools. Some of these are run direct­ly by the author­i­ty, while oth­ers are run by char­ter school oper­a­tors or con­tract­ed pri­vate enti­ties, which have full author­i­ty to edu­cate at their own dis­cre­tion, the district’s chan­cel­lor told Crain’s Detroit Business.

EAA chan­cel­lor John Conving­ton, who received a four-year, $1.5 mil­lion con­tract, pre­vi­ous­ly worked as a turn­around expert for Kansas City’s flail­ing schools. Under his watch, the Kansas City school sys­tem saw no progress and lost its accred­i­ta­tion. The EAA, which has been oper­at­ing since Sep­tem­ber 2012, has already been crit­i­cized for hir­ing inex­pe­ri­enced teach­ers, 1 in 8 of whom quit before the school year was fin­ished. The EAA schools have also had numer­ous tech­ni­cal issues with regard to test tak­ing, and an increased num­ber of dis­ci­pli­nary inci­dents. The Detroit News reports that in the sec­ond quar­ter of the 2012 – 2013 school year, the 8,000-student dis­trict had 5,200 report­ed inci­dents includ­ing tru­an­cy, drug pos­ses­sions and firearm pos­ses­sions. Yet leg­is­la­tors in Lans­ing are con­sid­er­ing expand­ing the dis­trict to over­see an addi­tion­al 35 schools.

Squeez­ing the middle

The after-effects of Detroit’s finan­cial tur­moil for cur­rent city employ­ees and pen­sion­ers have been doc­u­ment­ed at length since the city’s bank­rupt­cy fil­ing, as have the pos­si­ble out­comes of some the pro­pos­als Orr has detailed in his restruc­tur­ing plan.

For instance, turn­ing over the water and sewage depart­ment to a region­al author­i­ty, which some argue is a path­way to pri­va­ti­za­tion, could include lay­offs. A 2012 report rec­om­mend­ed slash­ing the depart­ments’ staff by 80 percent.

I’m a work­er and I believe in going to work,” says Ray­mond Love, 43, a waste­water treat­ment sewage oper­a­tor at Detroit’s Water and Sew­er­age Depart­ment who has worked for the city for 12 years. I was told this is a job you could raise a fam­i­ly on, this is a job you could retire on.”

Not only have Detroit’s restruc­tur­ing efforts put Love’s job pos­si­bly in jeop­ardy, but his retire­ment is also on the line. Orr has been clear: City employ­ees’ pen­sions will be cut. To what extent is not yet known. This will affect 21,000 pub­lic-sec­tor retirees and 9,700 cur­rent employ­ees — some of whom were pro­hib­it­ed from par­tic­i­pat­ing in the Social Secu­ri­ty sys­tem — who are count­ing on their pen­sions, which aver­age $1,600 a month, when they retire.

Mike Mul­hol­land, a for­mer Detroit water and sew­er depart­ment employ­ee who now works as sec­re­tary and trea­sur­er for AFSCME Local 207, which rep­re­sents Love, is equal­ly dis­mayed. I could’ve worked some­where where I could’ve [earned] more,” Mul­hol­land says. Mul­hol­land, 65, retired in Feb­ru­ary after near­ly 30 years on the job and receives $1,600 a month from his pension.

For years, he lived in what he describes as a nice, mid­dle-class neigh­bor­hood on the city’s east side. But com­fort fad­ed when the econ­o­my entered a reces­sion in 2008 and his pre­vi­ous­ly intact neigh­bor­hood came unhinged. It just went to hell,” he says, describ­ing a house next door that was aban­doned for two years, stripped to the bone by scrap­pers. After con­di­tions became intol­er­a­ble, Mul­hol­land says, he sold his home for $5,000 — one-twen­ti­eth of its pre­vi­ous value.

The buy­er paid in twen­ty-dol­lar bills. You think I asked where that guy got that mon­ey or what he was doing? Hell no, I just took it,” Mul­hol­land says.

The threat to his pen­sion wor­ries him. I’m retired. I’m not gonna be able to get a job at 65. It’s over. I’ve had a back oper­a­tion… What am I gonna do?”

Love also frets about the future. Every­one got plans in life,” he says. Every­one got futures to look toward. Hav­ing an uncer­tain future is my biggest fear. I don’t want to be look­ing for a job.”

Young urban pioneers

It’s become easy for reports on the city’s sit­u­a­tion to get bogged down in the minu­ti­ae of the emer­gency man­ag­er law, or in short-sight­ed debates over what sin­gle prob­lem caused the city’s downfall.

In truth, no mat­ter how many fac­tors led to Detroit’s down­ward spi­ral, there’s one sim­ple, glar­ing fact now dri­ving it: Since 2007, Detroit’s medi­an house­hold income has fall­en by $5,000 to $25,000 — less than half the nation­al medi­an income of $51,000.

The income lev­els are reach­ing a point where you can’t squeeze any more blood out of the turnip,” says Wayne State Uni­ver­si­ty law pro­fes­sor John Mogk. That’s why, despite fears of gen­tri­fi­ca­tion from some, the new mon­ey being pumped into the city’s down­town and mid­town appears promis­ing to many — in effect, a blood trans­fu­sion for the turnip.

Andy and Emi­ly Linn, a broth­er-sis­ter entre­pre­neur­ial duo who own the mid­town shops City Bird and Nest, see a big role in the future for the cohort of twen­ty-some­thing urban pio­neers who have moved to the area. Born and raised in the city, they’ve oper­at­ed the bou­tiques, which fea­ture local art, house­wares and hand­made goods, since 2011.

Peo­ple are excit­ed to see younger peo­ple just excit­ed about the city,” says Emi­ly, 35. Near their store­fronts, the bars fill up almost every night, a hand­ful of cof­fee shops are in close prox­im­i­ty, food options are vast and a future street­car line along Wood­ward will run the length of the cor­ri­dor between mid­town and down­town. Here, opti­mism for the city’s future is brim­ming. It’s a two-square-mile text­book exam­ple of a so-called walk­a­ble city.”

Cen­sus fig­ures from 2010 that revealed Detroit’s pop­u­la­tion shrank 25 per­cent over the pre­vi­ous decade also indi­cat­ed that the down­town saw a 59 per­cent increase in the num­ber of col­lege- edu­cat­ed res­i­dents under 35.

So, the wish­ful think­ing goes, as down­town and mid­town grows denser with new apart­ment build­ings and busi­ness­es (some­thing Andy Linn said is his biggest hope for the next few years), the revi­tal­iza­tion will radi­ate fur­ther into the city because, even­tu­al­ly, the appro­pri­ate spaces won’t exist to facil­i­tate future devel­op­ment. But, as it stands now, the jux­ta­po­si­tion of blight­ed neigh­bor­hoods against the down­town and mid­town area push­es an already tired cliché and nar­ra­tive of Detroit becom­ing ever-more-delin­eat­ed into a Dick­en­sian, two-tiered city.

And then there’s the ques­tion of whether the influx of mil­len­ni­als liv­ing in the city’s core will stay. While pub­lic ser­vices there have been scaled back but remain func­tion­al, a mid­dle-class young cou­ple is unlike­ly to send their chil­dren to one of Detroit’s dis­mal pub­lic schools.

No out­side solutions?

Sny­der and the Repub­li­can leg­is­la­ture have made it clear that emer­gency man­agers are their solu­tion to Michigan’s finan­cial­ly plagued cities. And Sny­der has said repeat­ed­ly that the state will not bail out” Detroit. The mes­sage is clear: Cut back, restruc­ture city gov­ern­ment and rein­vest with what is saved.

But that solu­tion has anoth­er fun­da­men­tal flaw: Bank­rupt­cy and aus­ter­i­ty-by-fiat don’t direct­ly address the city’s pop­u­la­tion deficit. Pri­va­tiz­ing edu­ca­tion, slash­ing union con­tracts and cut­ting pub­lic ser­vices won’t entice mid­dle-class residents.

If Orr’s pro­pos­als to revamp city ser­vices and attract new res­i­dents and busi­ness­es don’t sta­bi­lize Detroit’s income slide and pop­u­la­tion free fall, they could become mon­u­ments to fol­ly. With one-third of the city’s res­i­dents in pover­ty, Detroi­ters don’t have the mon­ey to main­tain the city’s retail out­lets, trans­porta­tion sys­tem, city infra­struc­ture or hous­ing stock, Mogk says. As George Gal­ster, author of Dri­ving Detroit and Wayne State urban stud­ies pro­fes­sor, recent­ly wrote in Detroit Free Press: Any future sce­nario where­in the city relies only on its own income and prop­er­ty tax rev­enues and fur­ther bud­get-cut­ting while it shrinks is doomed.”

Anoth­er option is for Detroit to seek out­side finan­cial aid through region­al ini­tia­tives to boost fund­ing, an effort that would have to be state-dri­ven. Mar­garet Dewar, pro­fes­sor of archi­tec­ture and urban plan­ning at the Uni­ver­si­ty of Michi­gan, says, Regions that have done real­ly well have tend­ed to say, We want to have region­al solu­tions, not just have every city on its own.’ ” She cites Metro, the region­al gov­ern­ment in Port­land, Ore., and Minneapolis-St.Paul’s Met­ro­pol­i­tan Coun­cil as suc­cess­ful exam­ples of how a region­al tax base can work.

Metro rep­re­sents 25 cities and three coun­ties sur­round­ing Port­land. Its sev­en- mem­ber coun­cil han­dles plan­ning, sol­id waste and recy­cling, finance and admin­is­tra­tive ser­vices, region­al parks, green spaces, and the Ore­gon Zoo. Sim­i­lar­ly, the Met­ro­pol­i­tan Coun­cil rep­re­sents sev­en coun­ties and han­dles pub­lic trans­porta­tion, waste water ser­vices, pub­lic parks and trails.

Dewar says this style of gov­er­nance pro­vides region­al coop­er­a­tion about tax­es they share,” which intends to pre­vent the entire region from impov­er­ish­ing the cen­tral city. She con­tin­ues, The cities [Port­land, Min­neapo­lis and St. Paul] have remained strong, so they’re the biggest con­trib­u­tors to the region­al tax shar­ing fund.”

But in metro Detroit, where some sub­ur­ban offi­cials push for more sprawl and cry foul when a busi­ness relo­cates to the down­town dis­trict, region­al­ism is deemed a pie-in-the-sky idea. It was only when Orr announced that the Detroit Insti­tute of Art’s pres­ti­gious col­lec­tion might have to be sold to appease cred­i­tors that the entire state woke up and real­ized every­one has some skin in the game.

Ini­tia­tives do exist at the fed­er­al lev­el that could help boost the city’s medi­an income lev­el. U.S. Rep. John Cony­ers, Jr. (D‑Mich.) has pro­posed a fed­er­al jobs pro­gram tar­get­ing areas in dire need of employ­ment, like Detroit. The most pal­pa­ble issue fac­ing [Detroit] has been the chron­ic lack of access to sus­tain­able employ­ment,” Cony­ers told In These Times in a state­ment. The bill would cre­ate 3 to 6 mil­lion full-time, mar­ket-wage jobs nation­wide in the first two years. Peo­ple would be put to work build­ing new roads, schools and parks. It would help sup­port the hir­ing of new teach­ers at schools and pro­vide staff for pub­lic-health and blight-removal projects.

But that’s all hypo­thet­i­cal. For the moment, the help Detroit will receive right now — emer­gency man­agers, bank­rupt­cy— is here.

So sure, take care of those unman­age­able” pen­sions that for­mer city employ­ees receive, and attempt to get a han­dle on the astound­ing long-term debt by pri­va­tiz­ing or out­sourc­ing ser­vices like the water and sewage depart­ment (which Orr says could save the city up to $70 mil­lion annu­al­ly) or trash pick­up (report­ed­ly an addi­tion­al $15 mil­lion).

But what if Detroit ends up in a finan­cial cri­sis again, unable to divest itself of its debt? What if none of this revers­es the pop­u­la­tion trend and its medi­an income remains stag­nant? What’s the plan at that point?

What are you going to sell off when there’s noth­ing left to sling?

Ryan Fel­ton is a staff reporter at the Oak­land Press in Pon­ti­ac, Mich. He lives in Detroit and occa­sion­al­ly blogs at Jalop­nik Detroit.
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