Aid for a Shrinking Detroit

The Michigan Legislature has passed a pair of bills that would lower the official municipal-population threshold for levying certain income and utility taxes to 600,000 from 750,000. The measures would effectively apply only to Detroit and allow it to continue collecting the taxes despite recent Census figures that show the city’s population fell to 713,000 during the last decade.

The measures could mean an additional $90 million in annual revenue for the cash-strapped and shrinking city, and is a key part of Detroit Mayor Dave Bing’s fiscal 2012 budget proposal.

 “Passage of this legislation shows that this Legislature and the Democratic caucus support the revitalization of Detroit,” said Rep. David Nathan, D-Detroit. “Maintaining a utility tax is critical to the delivery of services. This is a great day for the constituents of Detroit.”

In related news, Bing said Monday he would be forced to start laying off workers next week after the council approved a 2012 spending plan that cuts $50 million from his $3.1 billion proposal.

The mayor and City Council members have been locked in a budget debate for weeks.

The council approved the amended spending plan by an 8-1 vote Monday, saying the additional cuts were necessary to keep the city out of emergency financial management.

“Council’s override sends a clear message that a majority of the council would rather score political points than work together to solve our fiscal crisis,” Bing said during a press conference Monday afternoon after the vote.

“The budget I presented best served the residents of Detroit because it protected public safety and prevented drastic cuts in services that would cause more residents to leave the city.”

Bing said he still hoped to reach a compromise with the council that cuts $20 million instead of $50 million from the budget proposal.

They have until June 30 to craft a final spending plan.

The largest single cut is $8.4 million to the city’s police department.

Several council members have said they think that Bing’s budget relies on unrealistic revenue expectations.

“We want to show Lansing, Wall Street and Detroiters, there’s no need for an emergency manager to come in and make the tough decisions. We know what needs to be done,” Council President Pro Tem Gary Brown was quoted as saying in the Detroit News.

For reprint and licensing requests for this article, click here.
Michigan
MORE FROM BOND BUYER