The State of the State in Laingsburg, Michigan

Janae Jodway owns Body Works Medical Massage in Laingsburg

LAINGSBURG, Mich. – Michigan’s Governor Rick Snyder gives his second State of the State address tonight.  He’s already signed more than 300 public acts.  That’s a new law for almost every day in office.

Over the next few weeks, Changing Gears is looking at how changes in state government are impacting lives and wallets across the region. Here in Michigan, people are riveted by some of Snyder’s big ticket changes, like giving emergency managers the power to strip control from elected officials in failing cities and school districts.

But this story is different.  It’s about one Mid-Michigan town and all the small, drowned-out changes that deeply affect people’s lives.  People like Janae Jodway.[display_podcast] Continue reading “The State of the State in Laingsburg, Michigan”

Midwest Memo: Detroit’s Financial Troubles Examined, Chicago’s Unemployment Rate Worsens

Three stories making news across the Midwest today:

1. Detroit’s finances a long-term problem. In the past 45 years, the city of Detroit has recorded 19 budget surpluses and 26 budget deficits, according to the Detroit Free Press. Experts tell the newspaper the city’s debt is now so high that the city could default on unpaid bonds soon, a prelude to bankruptcy. State officials will begin a formal review of Detroit’s finances in January, which could lead to the appointment of an emergency manager. Gov. Rick Snyder said the city faces both a short-term cash-flow shortage and a longer-term structural deficit. “We can’t continue this process because Detroit has been in a financial crisis of some fashion for decades,” he tells the newspaper. “We need a long-term solution.”

2. 2011’s dubious housing distinction. The year 2011 will likely be the worst in history for new home sales. The Commerce Department said it expects the adjusted annual number to reach 315,000 by the close of this month, fewer than the 323,000 sold last year, the worst year on record dating to 1963. That’s less than half the 700,000 new homes economists tell the Associated Press are necessary to sustain a healthy market. The projection comes even as new-home sales rose 1.6 percent in November. December would need to mark its best monthly sales total in four years to avert the dubious finish.

3. Unemployment up in Chicago area. Chicago’s unemployment rate rose in November to 9.8 percent, according to the Chicago Sun-Times. The rate ticked upward one-tenth of a percentage point from 9.7 percent in October, and was up 0.9 percent year over year. The unemployment rate dropped in nine of Illinois’ 12 metro areas in November compared to 2010. Chicago’s rate remains slightly lower than the state’s overall 10.0 percent unemployment rate, which has remained nearly flat for three consecutive months. The state’s lowest unemployment rate was found in the Bloomington/Normal area, at 6.8 percent, according to the newspaper.

Midwest Memo: Illinois Residents Move Away, Columbus Seeks Revived Art Landscape, Pontiac Selling Its Assets

Three stories making news across the Midwest today:

1. Pontiac selling off properties. The financially troubled city of Pontiac, Michigan, is selling most of its assets. An emergency manager appointed in 2009 says the sales are necessary to help close a $12 million budget deficit. A three-page list of property available includes five fire stations, two cemeteries, two landfills, 11 water-pumping stations, two community centers, the public library and a police station, according to the Detroit Free Press. The city’s budget has already been cut by $20 million since the emergency manager took over.

2. Art scene in Columbus barren? The streets of Columbus aren’t devoid of eye-catching artwork, writes Robert Vitale of the Columbus Dispatch, but recent attempts to add art downtown have highlighted the fact the central Ohio city’s public landscape is “relatively barren.” Vitale notes that Columbus is the nation’s 15th-largest city, but the largest without a public-art program. In examining the state of public art in the city, he writes a 2007 economic development report called for better funding of public art, but Mayor Michael B. Coleman has made “no progress” over the past two years in making that a priority.

3. Study: Residents still flee Midwest. Illinois and New Jersey sat atop a list of states with the largest outbound migration this year, according to an annual study of interstate moving trends authored by United Van Lines. Although specific numbers were not available, a synopsis of the study said Americans continue to leave the Northeast and Midwest and migrate toward the South and West. Based in St. Louis, the company has tracked interstate moves since 1977 and says its study has reflected migration trends accurately enough that financial firms and real estate companies use the data. Despite the trend for Illinois, U.S. Census estimates say the state gained 38,625 residents over the past 15 months.

Midwest Memo: Detroit Mayor Dave Bing Defiant, Milwaukee Courts Chinese Investment, U.K. Investigates Groupon

Three stories making news across the Midwest today:

1. Bing defiant over looming Detroit takeover. A state takeover of Detroit and its ruinous financial situation has seemed imminent for weeks, if not months. On Thursday, Michigan Gov. Rick Snyder told Mayor Dave Bing he would initiate a 30-day review of the city’s finances, a precursor to the appointment of an emergency manager. Bing then gathered the city council and other leaders and declared his opposition. “We are Detroit,” he told the Detroit Free Press. “Detroit needs to be run by Detroiters.” Free Press columnist Rochelle Riley wonders whether the unified front is too little, too late. She asks, “Why does it always take a crisis?” before city leaders finally work together.

2. Milwaukee mayor China bound. Milwaukee Mayor Tom Barrett leaves Sunday for his second trade mission to China. He’ll spend a week visiting Beijing and the growing port of Ningbo, which already has an informal sister-city relationship with Milwaukee, according to the Milwaukee Journal Sentinel. Barrett tells the newspaper he’ll pitch the city’s strengths in manufacturing and industries related to water, food and beverages in hopes of luring more jobs and investment. He’ll also talk to Ningbo police commanders about purchasing Harley-Davidson motorcycles for officers. The Metropolitan Milwaukee Association of Commerce’s China Council will pay for the trip. In a related item, Chinese officials tell the Associated Press they want to convert some of the country’s U.S. government debt into investment in renovating American roads and subways.

3. U.K. investigates Groupon practices. Chicago-based Groupon Inc. is being investigated by Britain’s Office of Fair Trading over concerns about unfair promotions and exaggerated savings, Bloomberg reports today. The investigation commenced in July and expanded after receiving a complaint. “Given Groupon’s track record, we have serious concerns about its ability to adhere to the advertising code,” the U.K.’s Advertising Standards Authority said in a statement. In a written response, Groupon said it is “constantly evolving business process” and cooperating with the probe.

Midwest Economy Improves, Emergency Manager Appointed in Flint, Lawmakers Reject Incentives For Chicago Mainstays

Three stories making news across the Midwest today:

1. Midwest Economy Gains Ground. The Midwest Economy Index showed improvement in the regional economy in October for the first time in six months, according to the Federal Reserve Bank of Chicago. The monthly index, a combination of 134 state and regional indicators, ticked upward from -0.37 to -0.33. Manufacturing was the only sector measured to make a positive contribution to the index at +0.20, although it had ebbed from +0.23 in September. The pace of manufacturing activity decreased in Iowa and Wisconsin, but increased in Illinois and Michigan. Indiana held steady. The service sector and consumer spending showed improvements overall, while construction and mining activity fell.

2. Emergency Manager Takes Over Flint. Michigan Gov. Rick Snyder appointed an emergency financial manager for the city of Flint on Tuesday. On Thursday, Flint’s former mayor, Michael Brown, will begin serving in the position. Under the state’s revamped emergency manager law, Brown will have authority to control the city’s operations and finances, including the power to terminate employee contracts, merge departments and reduce pay. It’s the second time an emergency manager has been appointed in Flint, which had a $15 million deficit in the 2010 fiscal year. Emergency managers are already in place in Benton Harbor, Pontiac, Ecorse and Detroit Public Schools.

3. Illinois Lawmakers Reject Incentives Bill. Two of Chicago’s most visible companies, CME Group and Sears Holdings Corp., have threated to move elsewhere if they weren’t given tax incentives to stay. Illinois lawmakers are calling their bluffs. The Illinois House of Representatives rejected a bill, 99-8, that would have provided $200 million in incentives Tuesday, the final day of the legislature’s fall session. House Republicans wanted the bill to focus solely on tax breaks for businesses they hoped would lead to job growth, while Democrats wanted tax relief for workers and low-income families included, according to the Chicago Tribune. Gov. Pat Quinn said “ample” time remained to reach a deal, but in a written statement, a Sears spokesperson said, “Our timeline for making a decision about our future by the end of the year has not changed.”

Detroit City Council Concedes Emergency Manager Likely, Ponders Alternatives

Members of Detroit’s city council conceded today that state intervention is “likely” in the city’s looming financial crisis. Nonetheless, they are still hoping to corral the city’s $45 million budget shortfall themselves.

The council finalized a list of proposed budget cuts that now goes to Mayor Dave Bing for vetting. Steps outlined by the council are considered even more severe than the ones Bing outlined last week.

They include: layoffs for 500 public-safety employees at a time the city’s murder rate is the highest in the country, reduced salaries for other public employees, increased transportation fares, possibly selling some government property and more. A joint committee with the city’s chief operating officer will be held Tuesday to determine the viability of some of the proposals.

Continue reading “Detroit City Council Concedes Emergency Manager Likely, Ponders Alternatives”

Midwest Memo: Shale Boom Could Bypass Ohio, Groupon Stock Price Falls, Detroit Short On Time To Address Fiscal Woes

Three stories making news across the Midwest today:

1. Detroit’s fiscal crisis looms. The amount of time Detroit has to address the city’s looming financial crisis is “relatively short,” Gov. Rick Snyder tells the Detroit Free Press, before he must decide whether to commence a financial review of the city under the state’s controversial emergency manager law. The city could be insolvent as soon as April, according to reports. In response, the city council issued a proposal that was more far-reaching than Mayor Dave Bing’s earlier this week, proposing a 20-percent income tax increase and 2,300 layoffs, among other items. “We are running out of time,” councilman Andre Spivey tells the newspaper.

2. Groupon stock sharply declines. Shares of Chicago-based Groupon are “getting pummeled” for the third consecutive day, reports the Chicago Tribune this afternoon. They are now trading 15 percent below the initial public offering price of $20 on Nov. 4, and down 35 percent since Friday’s closing price of $26.19. Groupon had cautioned investors that trading could be volatile because it offered only a 5.5 percent stake in its IPO.

3. Shale boom could miss Ohio. Shale gas may not create the economic prosperity across Ohio that Gov. John Kasich has touted as a jobs creator, warns a new report. The problem? The gas industry has been too successful. There’s so much natural gas supply across the U.S. that prices are falling. And no one is quite sure how much actually lies beneath the Buckeye State, reports The Plain Dealer. The jobs gain, once predicted to number as many as 200,000, “will happen on some scale,” Andrew Weissman, executive director of Energy Business Watch, tells the newspaper. “But the question is whether it moves quickly or whether it moves slowly so that it only has a modest impact on Ohio’s economy.”

Here’s What You Need To Know About How Mayor Dave Bing Intends To Fix Detroit’s Fiscal Crisis

Detroit faces a bleak fiscal future and needs to change. In a hurry.

That’s the message Mayor Dave Bing delivered in a speech about the city’s grave financial condition. Detroit faces a cash-flow shortfall of $45 million as soon as April, at which time it would be insolvent. Without immediate changes, the state of Michigan will likely appoint an emergency manager whose power exceeds the mayor and city council.

Mayor Dave Bing hopes to stave off state intervention in Detroit's fiscal crisis.

In order to stave off a move that would be unprecedented for Michigan’s largest city, Bing has proposed a variety of fixes: an across-the-board 10 percent pay cut for city employees, increasing employees’ share of health-care premiums by 10 percent, a not-quite-1-percent tax increase on city businesses, the privatization of the city’s lighting and transportation departments and retiree pension reforms.

He also requested $220 million from the statehouse, a give-back for cuts in revenue sharing (a request that almost certainly will not be granted).

Is Bing’s overall plan enough to thwart state intervention? Reviews are mixed.

Continue reading “Here’s What You Need To Know About How Mayor Dave Bing Intends To Fix Detroit’s Fiscal Crisis”

Can Emergency Manager Roy Roberts Fix ‘Disgrace’ of Detroit’s Schools?

As part of a rebranding effort for the Detroit Public Schools, the district has adopted the optimistic slogan of “We’re in,” this year. Cheerleaders and a marching band were on hand at some schools for the opening of classes.

The school district, National Public Radio reports, wants parents to know “this is not the same old struggling school system.”

It’s not the first time leaders of the image-conscious district have tried shaking up its dilapidated image, although previous attempts have not rescued the district from its ailments. Dan Rather Reports documented the spiral and crumbling conditions in May in its “A National Disgrace” report on Detroit Public Schools. It followed up with another segment Tuesday night that examined the district through the eyes of its students.

Continue reading “Can Emergency Manager Roy Roberts Fix ‘Disgrace’ of Detroit’s Schools?”

Midwest Memo: Ohio Unemployment Rate Rises, Michigan Governor Seeks Supreme Court Intervention

Three stories making news across the Midwest today:

1. Ohio’s unemployment rate rises. Employers in Ohio added more jobs in July, but the state’s unemployment rate nonetheless inched upward 0.2 percent to 9 percent overall, the Columbus Dispatch reported Friday. It’s the second consecutive month the figure has climbed. A separate survey showed Buckeye state manufacturers added 7,900 jobs in July. Ohio wasn’t the only state to see an unemployment climb. Earlier this week, Michigan’s unemployment rate jumped 0.4 points to 10.9 percent in July.

2. Chicago casino’s path clearer. “I cannot continue to have Hammond, Indiana, get $20 million a month while our infrastructure is crumbling.” That’s how Chicago mayor Rahm Emanuel explains his transition from a position of reluctance to now embracing the idea of a Chicago casino. CBS Chicago says the mayor believes he and Illinois governor Pat Quinn can iron out differences in casino plans. The Illinois state senate still has a hold on a bill that paves the way for the casino and other state gambling.

3. Michigan governor seeks court ruling. Gov. Rick Snyder has asked the Michigan Supreme Court to quickly address the constitutionality of legislation he signed earlier this year that allows emergency managers to take over financially troubled communities and school districts. Opponents of the law who filed a class-action lawsuit in Ingham County earlier this year called Snyder’s move an attempt to “bypass the judicial system,” according to the Detroit Free Press.