NCPA - National Center for Policy Analysis


January 31, 2006

Detroit's new mayor has a daunting task awaiting him as he steps into office, says Michael LaFaive of the Mackinac Center for Public Policy: bringing the city out of poverty.

Since 1961, Detroit's decline has been widely publicized and the city is now considered the poorest in the United States; but with a new mayor, Detroit might be able to make fundamental changes to its economic landscape, says LaFaive.

The following recommendations will help return prosperity to the city of Detroit, says LaFaive:

  • Accelerate reductions in the city income tax and add no new or higher taxes to the already sky-high tax burden.
  • Contract city services to competitive private firms with proven track records; the city should conduct a "Yellow Pages" review of the services it provides -- that is, it should ask, if you can find it in the Yellow Pages, should city government really be doing it?
  • Whenever private companies can perform a particular activity, the city should either stop producing it or provide it through competitive bidding.
  • Dramatically downsize the city bureaucracy, now one of the largest per capita in the Midwest, and sell such assets as underused buildings and equipment, and employ these one-time revenues for debt reduction and for financing unfunded retiree health care obligations.
  • Reduce the regulatory burden on city businesses to a level similar to comparable cities.

Obviously, there is more the new mayor can do, but this outline could help change Detroit's fundamental economic climate, says LaFaive.

Furthermore, real reform can't be postponed; if Detroit's decline persists and the city's financial problems continue, the state may be forced to appoint an "emergency financial manager" to run the city, which could lead to an ignominious end for the mayor and Detroit itself, explains LaFaive.

Source: Michael D. LaFaive, "An Agenda for the Next Mayor of Detroit," Viewpoint on Public Issues, no. 2005-28, October 3, 2005.

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