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Inside Story Americas

Taking over Detroit City

As Michigan State may soon take control of the city's finances, we ask if the move will be in its residents' interest.
Last Modified: 13 Mar 2013 09:31

The problems of Detroit have been well-documented over recent years - a declining population, high crime and crumbling neighbourhoods. But now, the city is facing its toughest challenge yet.

On Tuesday, city council officials appealed against a move to let the state of Michigan take over Detroit's finances.

"Detroit's decline precedes the riots in the 1960s. You had people leaving in the 1940s, 1950s as a result of federal housing policy that made it possible for many white Americans to leave the city for the suburbs. Many African-Americans were denied the same opportunities."

- Darrell Dawsey, an author and journalist

The proposal by Michigan's Republican Governor Rick Snyder would make Detroit the largest US city ever taken over by its state.    

It would see an appointed "emergency manager" installed, someone with virtually unchecked power to gut union contracts, cut employee health insurance and slash services.

Some councillors also argue it would leave the mainly African-American city without democratically-elected representatives.

Michigan has declared a series of local financial emergencies since 1990. Currently, the cities of Flint, Benton Harbor, Pontiac, Ecorse are all under the supervision of the state.

Also, school districts in Detroit and Highland Park have a state-appointed emergency financial manager.

The state-appointed fund managers have widespread powers to cut city spending, change contracts with labour unions eliminate entire city departments or sell city properties - all without the consent of local officals or residents.

And this is possible because there is no right to local government enshrined in the US constitution.

So how effective have these emergency interventions been elsewhere in Michigan?

The city of Highland Park was first taken over by the state in 2001. But, the first emergency fund manger was sacked after it was discovered that he took unauthoritised payments - he had publicly agreed to a salary of $1. And now it is back in debt and has an emergency fund manager for the city's schools.

"Emergency managers don't have the tools to rebuild local economies. You can't create a sustainable economy by just slashing and cutting spending."

- Chris Savage, the owner of Eclectablog.com

The city of Hamtramck's finances were under the state's control form 2000-2007. But in 2010, it went back into the red and was forced to declare bankruptcy.

In 2011, the city of Pontiac got an emergency manager, Lou Schimmel. He has faced criticism for outsourcing police services and privitising major city departments. The city's public employee workforce has also been cut by 90 percent.

Flint, Michigan also had an emergency manager from 2002-2004. But that did not help much at all. It now has yet another emergency manager in place and it currently faces a budget deficit up to $20m.

So is a state takeover of Detroit's finances really in its residents' interests? And do citizens risk being further marginalised by corporate interests?

Inside Story Americas, with presenter Shihab Rattansi, discusses with guests: Darrell Dawsey, a journalist, author and columnist for the Deadline Detroit news website; Bettie Buss, a former supervising budget analyst for the city of Detroit; and Chris Savage of Eclectablog.com - a progressive news and political commentary website.

"I think the city needs to move forward and it's been hard for them to do it with the mayor and the council members that we have. And, not just this mayor, but the previous mayors and city councils before."

Grant Lancaster, a restaurant owner

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