Detroit’s Proposed Budget: 2,500 Layoffs, $250 Million In Cuts

The city of Detroit, which recently reached a deal for the state to oversee its finances, is

Photo submitted by Nathan Barnes

proposing a budget that  cuts more than 2,500 jobs in an effort to reduce its annual expenses by  $250 million.

The Detroit Free Press says the 2,500 layoffs would be on top of 1,000 job cuts Mayor Dave Bing sought earlier.

The proposed budget, laid out for city council’s review, also calls for the Detroit Department of Transportation, the city’s troubled bus system, to be privatized. It would transfer operations of the city’s lighting department to an independent authority.

Many homeowners have complained about broken street lights and problems with Detroit’s power grid, which is separate from the rest of the area.

Meanwhile, Michigan Gov. Rick Snyder is set to speak about the city’s future today. 

 

Midwest Memo: Tracking Tax Incentives, Rebounding RVs And Foreclosure Numbers

Not tracking incentives Few states are doing a good job tracking their business tax incentives. That’s according to a new report from the Pew Center on the States. The AP has a writeup. Among Midwest states, Pew says Wisconsin, Minnesota, Iowa and Missouri are “leading the way.” Michigan and Ohio have “mixed results.” And Illinois and Indiana “trail behind.” The full report is here.

Revved up for RVs PBS Newshour reports on the rebounding RV industry in Indiana. The town of Elkhart was struggling just a few years ago because of a downturn in RV sales. Elkhart turned to electric vehicle maker Think to help boost jobs. Now, Think is in bankruptcy, and the RV companies are hiring again.

Now, on to the budget Detroit mayor Dave Bing will present his budget plan to city council this morning. It will be the last budget proposal from the mayor before a new financial advisory team takes over the city’s finances.

In full bloom A report from Michigan State University says the state’s agricultural sector grew dramatically during the recession. Partner station Michigan Radio has the details of the report, which claims agriculture now contributes $91.4 billion to the state economy.

Foreclosures New foreclosure numbers are out from RealtyTrac. The Midwest still has 7 states in the top 20 for highest foreclosure rate.

Detroit Has A Consent Agreement. What’s Next?

Spirit of Detroit. Credit: flickr user Urban Adventures.

After weeks of debate and sometimes raucous dissent, leaders in Detroit and Lansing finally signed off on a financial stability agreement for the city yesterday.

You can read the full agreement here. But as important as the agreement is, it doesn’t actually solve any of Detroit’s pressing financial problems. It merely lays out the structure and the powers of the new group that will.

So today is when the real work begins.

The Detroit Free Press reports today that the first step in the process is to hire 11 people. Mayor Dave Bing is in charge of finding the first two:

Mayor Dave Bing now has six days to create the positions of the city’s chief financial officer and program management director and 30 days after that to hire the people for the positions. Those holding the jobs must have experience in municipal finance and balancing the books of a government operation of at least $250 million. The candidate list and ultimate hires will have to be approved by Snyder and Bing.

The mayor, governor, state treasurer and city council will also each have a say about who goes on the nine-member financial advisory board that will oversee the city’s finances for the next few years.

Once the team is in place, the next big question is how to salvage Detroit’s finances. That’s where things may get ugly. Continue reading “Detroit Has A Consent Agreement. What’s Next?”

Midwest Memo: Detroit Has A Deal, Chicago Has Crippling Debt And Ohio Has Bulldozers

Detroit’s deal Last night, the Detroit City Council voted to approve a consent agreement with the state to avoid takeover by an emergency manager. That means, as long as the governor signs the deal as expected and the courts don’t strike the deal down, Detroit finally has the first step in a plan to avoid bankruptcy. Partner station Michigan Radio reports on what it all means.

Chicago’s debt problem The Chicago Sun-Times went looking for reasons why Chicago would turn to private partnerships to fund its new multi-billion dollar plan to rebuild infrastructure. One major reason: the city’s staggering debt. Chicago can’t take out any more bonds to pay for improvements because the city spends almost 23 percent of its annual budget paying off the $7.3 billion in debt it already has.

Illinois’ turn Illinois is getting into the fracking game. Crain’s Chicago Business says the state could see a natural gas-drilling “boomlet” as companies explore southern Illinois for possible drilling.

Bulldozing blitz Partner station WCPN Ideastream had a story on NPR’s Morning Edition today that looks at the effort to tear down vacant houses in Ohio. The state set aside $75 million from its share of the $25 billion nationwide mortgage fraud settlement to pay for demolitions.

No more coal ash The Ludington Daily News reports the city’s historic car ferry has received a grant to convert its fuel source. Without the grant, the coal powered ferry would have been forced to shut down by the EPA. The historic vessel dumps about 500 tons of coal ash into Lake Michigan every year.

#goodnewsforDetroit Twitter says it will open a new office in Detroit. Michigan Radio’s Jennifer Guerra reported the news in tweet form. You have to hear it.

Watch Live: Governor Snyder To Take Questions From Detroiters At 11 a.m.

Watch live streaming video from snyderlive at livestream.com

On Monday, the state appointed financial review team for Detroit held its final meeting, and members got an earful from Detroiters who are worried that their city could face a takeover. Today, governor Rick Snyder is speaking in the city, and he’s expected to take questions. The governor has until April 5th to reach a consent agreement with Detroit leaders. If that doesn’t happen, he’ll likely appoint an emergency manager to run the city.

The event will stream live at 11 a.m.

Have We Reached The Final Countdown For Detroit?

Detroit's financial review team listened to impassioned arguments during public comment at yesterday's meeting. Credit: screen shot of streaming coverage from wdiv.com.

We told you yesterday would probably be a historic day for the city of Detroit. Well, not so much.

The state-appointed financial review team for the city did hold a meeting, as expected. It was a pretty raucous meeting, as our partner station Michigan Radio reported. The reviewteam was required by law to make a recommendation to the governor about how to handle Detroit’s “fiscal crisis.”

There were basically two options: Recommend a consent agreement with the city, or recommend appointing an emergency manager who has the power to toss out union contracts, sell assets and balance the books. At the time of the meeting, no consent agreement had been reached with the city, so the emergency manager option – an option no one really wants – was starting to look more likely. But instead of taking option 1 or 2, the review team took option 3: Restate that there is a fiscal crisis in the city, restate that the team prefers a consent agreement and restate the obvious fact that there is currently no consent agreement. Not exactly a historic decree.

Essentially, the team kicked the can.

Continue reading “Have We Reached The Final Countdown For Detroit?”

Midwest Memo: No News In Detroit, Michigan’s $1 Billion Year And Transit Worries In Chicago

Nothing yet There’s still no consent agreement between the city of Detroit and the state of Michigan. The team that’s been reviewing the city’s finances re-affirmed yesterday that they believe the city is in severe financial stress. But they did not recommend that the governor should appoint an emergency manager. Partner station Michigan Radio says the state and the city now have 10 days to reach a deal, before the governor is forced to take action.

Pure money Michigan’s tourism bureau says the Pure Michigan ad campaign helped attract a record $1 billion in travel sales last year. Partner station Michigan Radio reports that number is up from $605 million the year before.

Tripping up transit Chicago could lose $1.2 million per day if Congress doesn’t approve an extension of the country’s transit legislation by Saturday. The Chicago Tribune says the funding shortfall could jeopardize plans to buy buses, and modernize railway equipment in the Windy City.

Bigger, faster A study panel in Wisconsin has recommended a $207 million dollar expansion for the Lake Parkway in southern Milwaukee County.

Lottery online Illinois became the first state to sell lottery tickets online. The state made $15,000 on the first day of online lottery sales, according to NBC Chicago.

Off the hook Ohio legislators are considering a law that would allow phone companies to drop landline phone service in some areas of the state. Partner station WCPN Ideastream reports a collection of consumer groups say the change would hurt seniors and low-income people who don’t have cell phones.

Answers To The 9 Most Important Questions In Detroit Right Now

Downtown Detroit. Credit: David Tansey.

One way or the other, today is likely to go down as a historic – and possibly transformative – day for the city of Detroit. The city is burning through its cash, and fast approaching bankruptcy. By the end of the day, we could know more about what approach the state will take to help avoid that bankrupcty.

But the negotiations over Detroit’s future have taken a lot of confusing turns in the past couple of weeks, so we’ve tried to put together some answers to the city’s most pressing questions.

What’s happening today? Today is the deadline for the city to sign off on a proposed consent agreement with the state. The agreement would lead to the creation of a new panel to restructure Detroit’s finances.

What’s actually in the consent agreement? A lot. Sarah Cwiek at partner station Michigan Radio has an explainer.

What happens if the consent agreement isn’t signed today? Some say the state’s financial review team will be forced to recommend that Gov. Snyder appoint an emergency manager. Then, the governor will have 10 days to do so. But the Detroit Free Press says some of the details are still up for debate.

Continue reading “Answers To The 9 Most Important Questions In Detroit Right Now”

A Website That Lets You Comment On Detroit’s Proposed Consent Agreement, Paragraph-By-Paragraph

Downtown Detroit. Credit: David Tansey.

Over the past week, “consent agreement” became the two most important words in the city of Detroit.

Michigan governor Rick Snyder offered a proposed “consent agreement” as a way to avoid appointing an emergency manager for the city.  We did our best to explain the proposal last week, and our partners at Michigan Radio have had extensive coverage.

But the governor’s consent agreement is a long and sometimes confusing legal document. The folks at Code for America seem to have found a unique way of breaking it down. They’ve published the entire proposed agreement to detroitagreement.digress.it, and opened it up so people can comment on each individual paragraph.

So far, commenting has been light, but plenty of people have questions about how certain sections of the agreement will be interpreted.

We talked to Matt Hampel, who created the website as part of his fellowship for Code for America. He and two other fellows are working with the city of Detroit on web-based apps to help the city. Hampel says the consent agreement site is kind of a side project, but the Code for America Team will have new web projects coming out over the next few months.

“We’re looking at issues of transit information, and we’re looking at building some tools around community mapping … We wanted to build online tools that make it easy to collect information about your neighborhood.”

Hampel says he also plans to follow up on the consent agreement site, as new proposals are released. You can find updates at codeforamerica.org/detroit.

Midwest Memo: Tax, Baby Tax, Lollapalooza And A “War Of Words” In Detroit

Fracking taxes Ohio governor John Kasich unveiled a plan yesterday that would increase taxes, and regulations, on the growing number of oil and gas drilling projects in the state. BusinessWeek says the higher taxes would raise $1 billion in revenue by 2016. Partner station WCPN Ideastream says the new revenue will offset an income tax cut for Ohioans.

Lot o’ Lollapaloozas The Chicago Park District signed a new nine-year agreement with organizers of the Lollapalooza music festival, according to the Chicago Tribune. One park official says the deal will give the city a $1 billion boost over the next decade. But ticket prices for music fans will probably be going up.

No consent Tuesday, the State of Michigan offered leaders in Detroit a consent agreement to allow a new panel to solve the city’s budget crisis. Now, the Detroit Free Press reports the city is working on a counter-proposal, while the Associated Press says a “war of words” has broken out between the mayor and the governor.

Starting up startups The Wall Street Journal takes a look at Chicago’s growing scene for startups. But the paper finds Chicago still has a long way to go to compete with New York or Silicon Valley for startup money.

Keeping up with foreclosures Chicago foreclosure filings spiked upward in February, according to the Chicago Sun-Times. The Columbus Dispatch says filings were also up in Ohio, though they’re down quite a bit compared to a year ago. And partner station Michigan Radio reports foreclosure filings were down in Michigan for the month.

Prison time Rod Blagojevich reports to prison today. Partner station WBEZ has the story.