Alcoholics and drug addicts often say they had to hit rock bottom before they recognized how dire their problem was and decided to seek help.
The city of Detroit almost hit rock bottom, i.e., having to file for bankruptcy, but early this evening the Detroit City Council voted 5-4 to accept a consent decree with the state of Michigan, which will take on a major oversight role in righting the city's finances.
A financial advisory board will have broad latitude to rein in spending and guide the city in its future financial dealings. Had this agreement not been reached, Gov. Rick Snyder could have appointed an Emergency Manager as soon as tomorrow, and bankruptcy would have been a very real option.
For literally decades, Detroit has been spending more money than it collects in taxes, and selling bonds to pay the difference. This is similar to a ponzi scheme: At some point, you just plain run out of money even trying to make payments on past loans, to say nothing of funding current government. Detroit is days from running completely out of money.
Several factors have precipitated this crisis. First and foremost, five straight decades of Democrat control of the mayor's office and city council have led to irresponsible spending and practically carte blanche for labor unions. Despite a dramatic drop in population that put a major dent in tax revenues, spending kept rising, and generous wage, pension and health care agreements with dozens of unions were strangling the city's finances. (Only in recent weeks, with the walls closing in, did the unions accede to some concessions)
Topping it all off has been the rampant corruption, most notably that of former Mayor Kwame Kilpatrick and his thuggish posse. WAY too many crooks have had their hands in the till, and the lack of accountability and proper auditing over the years means much of that pilfered money will never be recovered.
Amazingly, there are vocal and irrational Detroiters who have bitterly opposed the consent agreement (as if they have ANY bargaining chip whatsoever). They are downright paranoid and delusional about a supposed outsider or interloper (the state) trampling on their city's autonomy.
Just what do these clowns think Detroit's options are, anyway? Don't they realize that if this consent agreement doesn't go into effect, a state law means the governor can appoint an emergency manager who will have an even firmer grip over the city's finances? And can't they acknowledge their city's culpability in bringing about this crisis?
My Posse colleague, K.N. McBride, was working with me in the Michigan Legislature in 1999 when then Gov. John Engler engineered a temporary takeover of the woeful Detroit Public Schools in an effort to administer some much-needed accountability and reform. You'd have thought the Republicans were killing the goose that laid the golden egg, the way Detroiters whined and shrieked. The same sentiment prevails with the consent agreement.
The financial advisory board must move swiftly to institute more checks and balances for Detroit's budgetary process, read the riot act to the unions, and in some cases bid out contracts to invite private competition and exert downward pressure on operating costs. Even if city workers win the right to provide certain services, private competition will force them to be more efficient and more reasonable.
Just as with myriad other problems (bad schools, crime, abandoned homes, and drugs, for example), Detroit has its work cut out. But it is at least is now moving in the right direction on the financial front.