Notable Quotable: “Decades Of Hostility Toward Cities Led To The Water Crisis”

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In Michigan, it seems like some keep doing the same thing over and over again and expecting different results.

This blog by former state treasurer Robert J. Kleine lays out an interesting statistic, and sets forth the idea that the real way forward to help communities in distress (and the state as a whole) are regional solutions – but Michigan voters never go for it.

Sure, Snyder’s administration and appointees seem to have royally screwed up on this to the point the Feds are looking into it. As they should. But going forward, we have to ask ourselves, how on earth did Flint get to the point where this could happen?

It’s a lengthy piece that’s like looking under the hood at the engine of government and worth reading if you have the time, but TL;DR excerpts below:

Any city with a per capita tax base below $20,000 will struggle financially and be forced to levy higher than average property tax rates or income taxes. (The per capita tax base is the taxable value of all property divided by the population.) Flint has a per capita tax base of $7,785: the local economy has been destroyed by the loss of over 70,000 well-paying automaking jobs since the 1970s; as a result, the median home listing price is around $50,000.

Cities with low tax bases are faced with a Hobson’s choice: If they set taxes high enough to provide decent services, residents and businesses move out; if they keep tax rates low, poor municipal services drive residents and businesses out. A strong regional revenue sharing program would allow communities with low tax bases, such as Flint, to maintain a reasonable level of services while avoiding uncompetitive taxes. Without revenue sharing, cities are caught in a vicious cycle that results in ongoing financial problems. This is demonstrated by the fact that Michigan has had more communities under an emergency manager’s control than any other state.

That lays out the idea that an an emergency financial manager can fix things (which we’d add some people forget was originally created during the Democratic James Blanchard administration in 1988, albeit without as many teeth), is mostly a fool’s errand. There’s no way an emergency manager can fix the core problems cities face. To that herculean task, they’re just a bandaid on the elbow of a broken arm. Even if you look at Detroit, it’s now Duggan that’s doing the weighty work now and trying to tax base revenue. Continued…

That’s because an emergency manager can’t solve a financial crisis created by a low tax base and a lack of revenue sharing. The forced austerity that resulted in Flint switching its water source from Lake Huron to the Flint River had no chance of improving the city’s financial condition. The only realistic long-term solution is increased revenue sharing and consolidating Flint into a metropolitan government with the rest of Genesee County. The water crisis makes state aid even more urgent, because it’s going to drive down Flint’s already bargain-basement property values. Who’s going to buy a house in a city with lead-tainted water? Flint may never suffer another water crisis, but without structural changes to state and local government, its financial crises will never end.

1 comment
  • Let’s not forget about the responsible parties in Flint at the time this took place. City Council and management in their water department also are a party to this as well!

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