And unless state and local elected officials stop ignoring these problems, there's a good chance more
Just look at Flint. Now in its second round of emergency management, Flint is struggling to fund its pensions and shed the high cost of providing health care for retired workers. But even with an emergency manager in place, Flint's options are limited. Unlike
"Since 2011, we've made the difficult decisions to reduce expenditures," said emergency manager
But without changes, Earley says, the city will be forced to make substantial cuts to its police and fire departments.
These are unpalatable choices. Cities made promises to workers, who built their lives around guaranteed retirement benefits. Reneging on those promises is unconscionable. Also unacceptable are service cuts so deep that residents' lives are endangered.
But budgets in cities like Flint have been cut to the bone, Earley said, and without the ability to alter legacy costs, the city won't be able to balance its books.
It should never have come to this.
A municipal financial gauge developed by
But neither Gov.
During his first term, Snyder has cut revenue-sharing, replacing most of it with a competitive incentive program that pits cities against each other, asking for operational efficiencies in return for state tax revenue allotments. It's fair to ask cities to function more efficiently, but it's a false equivalency, based on the premise that funding cuts can always be managed.
Yet even well-managed, affluent municipalities are struggling with underfunded pension and retiree health care obligations, driven in part by the precipitous drop in property values during and after the foreclosure crisis. Because of the way
"The municipal financing mechanism is definitely in need of overhauling, and cities need to be made a priority in discussions at the legislative level as
Small alterations to the way that cities collect revenue could make a tremendous difference, some municipal experts say. For example, changing
"If we're not going to allow property taxes to grow at the rate of the economy, which seems reasonable, we have to ask, 'What are the other options?' " Scorsone said. "And why is
Plenty of blame
Local elected officials are no less culpable. The financial crises in cities like
In cities with underfunded pension systems and massive retiree health care obligations, unsustainable promises were made decades ago and can't easily be altered.
But the focus among elected officials, it seems, is on warding off state intervention, on fighting any suggestion of loss of local control, even when that means digging a deeper financial hole.
Ficano's deficit-elimination plan is dependent on buy-in from outside groups, such as the county's labor unions and its other elected officials, who have little motive to accept the executive's proposed cuts.
It's reminiscent of deficit-elimination plans presented by a series of
Yet earlier this month, Ficano insisted to the Free Press Editorial Board that his plan is viable, that a buy-in is just around the corner.
There are tools
Preserving democracy is important. So is ensuring the safety and well-being of residents. So while a wave of emergency manager appointments, or a series of municipal bankruptcies, would be troubling, elected officials owe it to residents to explore all options.
Then there's the state's emergency manager law, which offers cities in fiscal distress the ability to negotiate a consent agreement with the state. Such agreements bestow some of the powers of an emergency manager onto a local elected official, with the caveat that a failed consent agreement could lead to the appointment of an emergency manager or a municipal bankruptcy.
For leaders of distressed cities, these are tools worth exploring.
Others not so lucky
Here's another hard truth that state and local officials must accept: If Flint, or
More crucially, a grand bargain among philanthropic foundations, the
The state's emergency manager law is a bandage meant to stanch financial bleeding, never meant to be a widespread solution. But 12 cities are currently operating under an emergency manager or consent agreement, or are under financial review. Unless the state changes the way it funds municipal government -- and local leaders get serious about fiscal health -- expect to see those numbers grow.
(c)2014 the Detroit Free Press
Visit the Detroit Free Press at www.freep.com
Distributed by MCT Information Services