Budget Talks Continue as Detroit Tries to Untangle its Fiscal Crisis
Detroit’s City Council is preparing to move ahead with its 2012-13 budget, even as the city awaits a decision about the legality of its consent agreement with the State, according to a Detroit Free Press article. The proposed budget includes cutting an additional 2,600 city jobs, eliminating or consolidating city departments, and privatizing part or all of the city’s transportation and lighting divisions.
Earlier this month, Mayor Dave Bing recently selected Jack Martin as Detroit’s Chief Financial Officer. In a recent press release, Bing says that Martin brings critical expertise from his work in both the public and private sectors to the City’s administrative team as it works to fiscally restructure the City. “Martin most recently served as Emergency Financial Manager of Highland Park Public Schools and was a member of the State’s Financial Review Team that reviewed the city’s financial status earlier this year,” according to the release.
Detroit’s website features a Financial Update section, which includes monthly cash flow reports, statements from the Mayor’s Office, and the Financial Stability Agreement between the City and the State of Michigan.
What’s going on in Detroit’s economy?
The unemployment rate for the Detroit area in March 2012 was 9.4 percent, down 2.3 percentage points from a year earlier, as illustrated by MuniNetGuide’s employment profile for the Detroit-Warren-Livonia area. This data also points to a 1.1 percent increase in employment (number of employed persons) over the past three months.
The Detroit metro area scored 60.0 percent on CreditAbility’s Consumer Distress Index, the second highest metro area in the country. The Tampa-St. Petersburg metro area was the only one to earn a lower score than Detroit. The index tracks trends in employment, housing, credit, household budgeting, and net worth. Scores of 59 and below indicate “emergency crisis” levels of consumer distress, placing it on the dividing line while scores in the 60-69 range reflect distressed, unstable consumer financial condition. Detroit’s score on this index has vacillated between 58.7 and 60.0 over the past four quarters.
Richard Florida, Senior Editor at The Atlantic and Director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management, sees a brighter side to counter all the gloom and doom clouding the City. In a five-part video series entitled, Detroit Rising on Atlantic Cities.com, Florida discusses the City’s prospects for urban renewal and revitalization.