Last month, Michigan appointed an emergency manager to take over the finances of Detroit and resurrect the city from its slumber. An emergency manager was appointed to essentially stand as a despot of Detroit’s finances. He was never elected but was given full control to try to prevent Chapter 9 bankruptcy, a form of bankruptcy reserved only for municipals, initiating reorganization rather than liquidation, while paving the pathway for possible future prosperity. Only a few whispers of complaints were voiced; for the most part, it seems as if the people of Detroit are putting their full trust in the government –and with good reason.
First off, the position and appointment of an emergency manager is not undemocratic, as a few groups, such as the City Council, have voiced. The emergency manager was put into a position created and appointed by elected officials. This is the only logical option as of now.
Detroit has a problem. Balancing the books will only do so much; it’s simply an ephemeral fix. The emergency manager can cut jobs to reduce spending, but still the revenue will be too low. In the past decade, the population of Detroit has dramatically decreased, subsequently reducing the revenue collected from income tax.
According to John Gallagher, a 26-year Free Press veteran and author of Reimaging Detroit, there is what’s called the “upstream/downstream” approach to solving this problem. With this approach, management of municipal services is passed onto a different entity that can better manage it. By sending it “upstream,” the responsibility can be passed on to the state authorities. By going “downstream”, the neighborhoods gain control and duty.
Cleveland’s University Circle, an urban neighborhood and cultural center of the city of Cleveland, has taken this approach by sending the services of the city downstream. The University Circle, Inc., a not-for-profit organization, has been taken under contract to service the district of University Circle, innovating education, health care, and eve the culture and arts. By passing this off to a non-profit organization, much of the political tensions and restraints are diminished; slowly, the city can be revived and enhanced.
This is the perfect time for Detroit to bring itself back into the ranks of America’s top economic cities. After the emergency manager’s time passes and once the accounts are balanced, the stage will be set for Detroit—for Michigan—to reclaim it’s prosperity. As Detroit’s private sector proves, there can still be success. The responsibility to maintain Detroit’s success must be passed on, downstream, in order for non-profits similar to University Circle, Inc. to take over.
Detroit’s fundamental problem - its decreased population and revenue - has brought the city to its knees. However, with this downstream approach, Detroit, or any city, would be aided through the concentrated focus of a second party – not the government, but a politically unaffiliated entity.
By making these changes, the country as a whole can recover and reassert the international impact we’re accustomed to. Detroit’s story can’t end with balancing accounts; we need effective capital expenditures to extend the life of one of America’s largest economic cities.