Detroit's new idea: A balanced budget
DETROIT – Budget season for fiscal year 2016 has arrived in Motown and it's a new day -- a very different day.
The billion-dollar budget proposal, constructed by now-former emergency manager Kevyn Orr and turned in Dec. 15th (Orr's last day on the job), is balanced. It leaves the city in position to have -- hold onto your hats -- a surplus.
The surplus appears to be about $10 million more than the required 5 percent cash reserve requirement by the bankruptcy plan. If its income stream holds at current levels, Detroit will be able to push forward that cash into 2016's fiscal year budget.
Yes, it hardly seems possible that the city so addicted to borrowing to pay its bills is acting financially responsible. But the city is being forced to act this way. In order for the state-appointed Financial Review Commission (FRC) -- which oversees all city spending -- to go dormant (allowing for the city to have its budget power back) there are a number of hurdles the city must clear:
1) Follow a balanced budget for three consecutive years
2) Approve a four-year spending plan the FRC likes
3) Gain access to the bond market on its own
4) Post all city contacts with vendors and suppliers within 30 days online
When speaking to the Detroit City Council on Tuesday, Mayor Mike Duggan was quick to remind everyone about that process and expressed his desire to get to 2018 with balanced budgets so the city can get its self-determination back.
"If our first action is to send them a bunch of budget changes that the Financial Review Commission rejects as not justified, we are off to a bad start for trying to get out from under this control in 2018," said Duggan.
The City Council had questions. It would certainly like to make changes, but in the end it appears no one wants to rock the boat.
"There is always a temptation in politics to spend money you don't have, but because we're under this Financial Review Commission in the city of Detroit we can't operate under that standard. It's got to be an honestly managed budget," Duggan told Local 4.
Over the past couple of generations, the city of Detroit could not resist that temptation. Now it is being forced to. It's a refreshing change.
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