Sunday, April 3, 2005

Kilpatrick needs to ignore election year and remove budget's red ink

By Daniel Howes / The Detroit News

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What do you do if you're running for re-election and facing a $300 million deficit in a $1.6 billion budget?

If you're Detroit Mayor Kwame Kilpatrick and you're smart, you deliver an austere budget eight days from now that recognizes Detroit's dire straits by what it proposes to do, not by what its carefully crafted message says.

A realistic budget would cut another 2,000 jobs from a city work force of roughly 17,000, as the administration is considering. The cuts would target, in part, highly compensated do-nothing managers, and wouldn't exclude the police and fire departments simply because they fall under the term "public safety."

Those actions alone would telegraph to important constituencies -- rating agencies, institutional bondholders and would-be investors -- that Detroit is serious about fixing itself. Without their confidence and capital, Detroit and its residents will careen from one financial crisis to the next.

But if election-year instincts take over and Kilpatrick seeks a path of lesser resistance by proposing a phony budget laden with rosy revenue scenarios and bogus assumptions, two things will happen:

First, the financial table will be set for an outsider to be installed, as required by state law, to get the city's books in order. Second, the mayor will be blamed for his inability to lead the city out of a predicament that is his, even if he isn't totally responsible for it.

He'll pay the price politically; Detroit will pay, dearly, on financial markets; and Detroiters will be required to keep paying for a city that doesn't work but demands more of their dollars anyway.

What the city, its taxpayers, business leaders and outstate power brokers need from this morass is resolution. They need clear evidence that a tipping point has been reached and that Detroit leaders will match budget fantasy with fiscal reality.

If they can't or won't -- and I'm not yet sure that they can, mostly because they so far haven't -- the rationale for appointing an emergency financial manager or worse, a receiver, will gain credibility. And quickly.

Before the mayor's adversaries declare his budget dead on arrival, they should ask whether an outsider with broader powers to unilaterally cut pay, eliminate jobs and outsource entire departments is preferable to dealing with a politician, however flawed, who needs their votes this year.

The answer is no, an outsider should not be preferable to them. And if the state schools takeover is any indication, it's not preferable to average Detroiters, either.

The second set of questions the mayor's opponents should ask is equally simple: Are they willing to seek compromise and risk a backlash to better ensure the city's self-government? Or does their hunger to extract value from the city and maintain political standing -- even if that puts more people out of work -- trump everything?

The tipping point is near -- for the mayor and an administration whose revenue is declining; for a City Council whose constituents are fleeing; for unions guarding pay and perks that are unsustainable in a city with fewer people and less revenue.

It's really that simple.

Daniel Howes' column appears Sundays, Wednesdays and Fridays. He can be reached at (313) 222-2106 or at dchowes@detnews.com.