NCPA - National Center for Policy Analysis

DETROIT'S SCANDAL IS ABOUT MORE THAN SEX

April 29, 2008

Although few believe that Detroit Mayor Kwame Kilpatrick can -- or should -- hang on until the end of his term next year after a recent sex scandal, there is also much worry that, without him, his economic reforms will wither.  That, actually, wouldn't be such a bad thing, says Shikha Dalmia, a senior analyst at the Reason Foundation.

Kilpatrick's entire economic revival plan rests on attracting high-profile, flashy projects.  True, he has been more successful than his predecessors because of his wily ability to cut deals and push them through a dysfunctional city bureaucracy, says Dalmia.  For example, Kilpatrick, along with predecessor Dennis Archer:

  • Managed to land the contract to host the 2006 Super Bowl.
  • Convinced General Motors, Compuware, and Quicken Loans Inc. to relocate their offices downtown.
  • Created three casinos, and in convinced developers to restore old, historic hotels to serve the casino patrons.

Kilpatrick and Archer lured each of these projects with targeted tax breaks and subsidies.  But corporate giveaways are not the stuff of an economic revival.  Indeed, every indicator of economic and civic renewal has trended in the wrong direction since Kilpatrick became mayor.

Consider:

  • There is not a single year in which Detroit's unemployment rate -- currently at about 15 percent -- has been lower than in 2001, the year before he took office.
  • Income tax revenues last year were $27 million less than three years ago, a testimony to the city's contracting tax base.
  • Meanwhile, high school graduation rates are an abysmal 25 percent, and homicide rates an astronomical 47 per 100,000, the highest among comparably sized cities.

Source: Shikha Dalmia, "Detroit's Scandal Is About More Than Sex," Wall Street Journal, April 26, 2008.

For text:

http://online.wsj.com/article/SB120916727098046281.html 

 

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