Detroit's human services department will be eliminated, the transportation and lighting departments will be privatized, and 2,600 jobs will be cut -- including EMS and firefighters -- under a $1.12-billion budget sent Thursday to Mayor Dave Bing by the City Council.
Frustrations boiled during more than two hours of council discussion about the 2012-13 budget, which includes many of the nearly $250 million in spending reductions proposed by Bing.
Most of the disagreement was about whether the city could even approve a budget that was crafted through a consent agreement that four of nine council members did not support and that the city's top lawyer has declared illegal.
Council members JoAnn Watson, Kwame Kenyatta and Brenda Jones voted against the budget, which now goes back to Bing and must be approved by his office and the state by the end of June under terms of the consent deal. The agreement, reached April 4, prevented appointment of an emergency manager but gave the state broad oversight of city fiscal matters.
The spending plan calls for eliminating the city's human services department but adds six more months of funding for the city's health department and Coleman A. Young International Airport while their futures are determined. Bing wants to put both divisions under independent outside agencies.
The budget also would reduce the city's work force by nearly 2,600 people and, ultimately, privatize the bus and lighting departments. Although it spares the city's human rights department -- which Bing initially proposed eliminating -- the budget moves toward transferring the functions of the troubled human services department -- which administers federal funding for home weatherization, Head Start and other programs for poor people -- to outside charitable and social service agencies.
"We did the fiscally responsible thing to do, but it's tough," Councilwoman Saunteel Jenkins said after the meeting. "It means a lot of people are going to lose their jobs. It means a lot of city services are going to be cut back.
"We have to make these tough decisions now to get to a better place in the future."
The budget reduces the city's general fund by $246 million -- a $171-million spending reduction and $75 million to go toward paying down an accumulated deficit.
Under the consent agreement, the budget must meet the approval of the yet-to-be seated financial advisory board, which is made up of appointees by the governor, mayor, state treasurer and City Council. Until the full financial advisory board is named -- a decision that may be delayed for at least two weeks -- the Bing administration has been consulting with state Treasurer Andy Dillon's office on the budget.
But the budget was approved under the cloud of the unresolved issue of whether the city can proceed with the consent agreement, on which substantial portions of the budget were based.
The city's law department chief, Krystal Crittendon, issued a confidential opinion earlier this month saying the consent agreement violates the city charter and state law. Crittendon said the state owes Detroit $224 million in revenue sharing and $4.75 million from an unpaid water bill at the Michigan State Fairgrounds.
"We cannot violate the charter," Watson said Thursday. "We can't vote on something that is interwoven with references to a consent agreement that the chief attorney said is invalid."
Under the charter, Crittendon could oppose the agreement in court, a possible move in coming weeks. Council President Charles Pugh said Crittendon will first discuss the issue in a telephone conference Tuesday with representatives of state Attorney General Bill Schuette, Dillon and other city officials.
Pugh called the telephone conference largely a formality, representing "a real effort to settle a debt before you sue over it." Gov. Rick Snyder has said the state has no intention of paying the city the $224 million.
That dispute springs from a 1998 agreement with then-Gov. John Engler in which the state agreed to pay hundreds of millions in revenue sharing to Detroit in exchange for the city reducing its income tax gradually. The deal fell apart amid difficult budget times in Lansing and Detroit.
Council members who voted for the consent agreement said Thursday that they hope the matter is resolved quickly because the city is now in limbo, delaying progress on the consent agreement.
City Council fiscal analyst Irv Corley warned the council that Dillon's office has yet to approve the city's revenue estimates for 2012-13. Corley said Dillon's staff indicated that current revenue estimates from two crucial sources -- property taxes and casino taxes -- may be too high by several million dollars, and that could trigger additional cuts before the budget is approved by the end of June.
Copyright 2012 - Detroit Free Press
McClatchy-Tribune News Service
