Tuesday, December 22, 2009

Mayor of Detroit interviewed by Wall Street Journal

Today we take another virtual ride to the great American city of Detroit. This time courtesy of the Wall Street Journal with an interview with that city's Mayor, David Bing:
Dave Bing has just signed on to four years of maybe the most futile and thankless job in America: mayor of Detroit. What in the world was he thinking?

"I wouldn't have taken this job if this wasn't doable," he tells me. "I finished basketball in 1978, then went into my own business in 1980 and did it for 29 years. . . . Now I get to the end of that career and probably should have retired. But there was a calling greater than anything that I ever envisioned, and that was to help bring this city back."
His highest priority is balancing a budget that is swimming in red ink. "We have a $325 million deficit, and 2010 doesn't look any better. Right now revenue growth is still negative. We're taking in less money each year. We can't rebuild this city by constantly cutting, but in the short term, we don't have an option," he says.

How much has to be chopped? The major says that at its peak Detroit had a $3.6 billion budget. He hopes to get it down to $2.9 billion, almost a 20% real cut.

Dave Bing is no Milton Friedman when it comes to economic solutions. He's praying for lots of federal aid to help the city pull out of its ditch, he wants to borrow against future tax revenues, and he hasn't ruled out tax increases "if they have a sunset" to pay the city's bills. He believes it's a core responsibility of government to help people.

Yet Mr. Bing is a realist, something Detroit hasn't had at the helm for a long time. "We've been paralyzed by a culture in the city of Detroit, and maybe the state of Michigan, of entitlement," by which he means ever-rising union wages. "Our people, I don't believe, truly understand how dire the situation is. There are ugly decisions that need to be made and I'm surely not going to be popular for making them. But I didn't take this job based on popularity."

One group that surely isn't a fan is the public employee unions. He grumbles that there are 17 unions with over 50 separate bargaining units. "I can give you a data sheet that will show you we've got several of those bargaining units with less than 100 people, and each one of them has a president that's paid by the city to negotiate against the city," he says. "Coming from the private sector, I find that insane."

Mr. Bing's gladiator-like brawls with the union bosses have drawn national attention. Earlier this year, he forced nonunionized city workers to take a 10% pay cut and unpaid furloughs. Now he's demanding the same pay concession from the unions. At one point the union got so fed up with Mr. Bing's refusal to buckle to their demands that they asked the courts to toss him in jail for violating their contracts. That didn't happen, but the unions did win a court challenge when the mayor refused to collect union dues out of city paychecks.

"Today in the city of Detroit," he tells me, "our union employee benefits cost 68% of what their base wage is. I don't think that happens in any other place in the country." To give a sense of how excessive those pay packages are, he adds: "When you look at one of the most dominant labor unions in the world, the UAW, they're nowhere close to what we give our city workers."
Unions! In Chicago, they're costing the Chicago Transit Authority a lot of money. They're costing Detroit a lot more apparently, of course they have some pull as well whether in Chicago or in Detroit.

At the same time Bing is a Mayor of a long suffering city and I wish him a lot of luck. It'll take a lot of time to bring Detroit back to one of America's finest cities. But MoTown has a long way to go in that regards. I look forward to more news.

Via Urbanophile!

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