3 Questions About The Motor City

[MizMotown]

1. Why are Detroit officials simultaneously moving to cut municipal workers' pensions while spending hundreds of millions of dollars on a new professional hockey stadium?

2. Why are municipal employees being blamed for Detroit's woes when data prove they had little to do with the city's fiscal problems?

3. If Michigan is so strapped for cash, why is Gov. Snyder almost doubling the salaries of his top officials?

http://truth-out.org/buzzflash/comme...the-motor-city

[Dan Wesson]

Those three questions are fine examples of rhetoric. Questions asked that aren't meant to have an answer but to provoke thought and dialogue.

Otherwise, they show a complete naivety on the authors part about our society.

[Wesley Mouch]

Why are Detroit officials simultaneously moving to cut municipal workers' pensions while spending hundreds of millions of dollars on a new professional hockey stadium?

The overall welfare of the citizens of Detroit requires both prudent expenditures and future income. Hockey arenas and other economic development are investments in the future of our citizens. No pension cuts have yet been proposed. But we all know that there are some pension abuses, like people who make over $100,000 in retirement. The courts have decided that pensions can be adjusted, if done so fairly and with great care and respect.

Why are municipal employees being blamed for Detroit's woes when data prove they had little to do with the city's fiscal problems?

I don't hear anyone blaming municipal employees, but it is beyond doubt that Detroit's administration has not been well managed to control costs and has burdened Detroit taxpayers with costs out of line with the services delivered. Some do blame the employee Unions for not allowing workplace adjustments to work rules to reduce that burden. But I've never heard anyone say the municipal employees are to blame.

If Michigan is so strapped for cash, why is Gov. Snyder almost doubling the salaries of his top officials?

I've not heard that Michigan is strapped for cash? As with almost every unit of government, money is tight. But Michigan appears able to borrow as it needs to invest and to spend as it feels it best needs.

I don't know if those individuals deserve those raises. Compensation of public employees from rank and file up through the top of the public bureaucracy should be reorganized. Turkia Mullins and that other WC retiree that'll be collecting over $100,000 a year in pension on our tab are examples.

But that said, you have the opportunity to call for new ways of managing public compensation. You might start with capping pensions at 100% of average salary for last 10 years worked -- never less. If you don't like Snyder's management, you'll have the opportunity to vote against him soon.

[GP For Life]

"Robert Inman, Wharton School, University of Pennsylvania, argued that Detroit has to set up the right set of institutions and incentives that will create the appropriate fiscal culture. Inman said fiscal crises result from weak demographics, a weak economy, and weak public policies. Wage and benefit increases without compensating marginal productivity increases is a “recipe for disaster,” said Inman, something Detroit pensioners face under Chapter 9 bankruptcy."

http://michiganeconomy.chicagofedblogs.org/?p=499

[Ray1936]

How come I'm only getting 1/5th of those 100k pensions? At least, I was........

[Wesley Mouch]

How come I'm only getting 1/5th of those 100k pensions? At least, I was........

Because someone else is get 6/5's of the $100,000. Do you think its fair that there are pensions over $100,000 for government workers?

[renf]

Is there a sufficient tax base in Detroit to support requisite municipal services
after the bankruptcy process is completed? I think not. Detroit is one of many school districts and cities in Michigan than no longer have a tax base sufficient to support the area's government. I wonder when this will be recognized?

[coracle]

This discussion related to Pensions has made me think that the majority of us pay 7.15% to our Social Security [[and we're taxed on the payment), and our Employer pays 7.15% into Social Security in our names; and when we get it it's taxed again. But more to the point we are frequently being warned that the "benefit" [[which it isn't) is running out of funds and we might not get it when we retire. Why is it that we never hear of any of the Welfare Benefits being in danger of running out of funds? After all none of the recipients ever pay anything in.

[Wesley Mouch]

Is there a sufficient tax base in Detroit to support requisite municipal services
after the bankruptcy process is completed? I think not. Detroit is one of many school districts and cities in Michigan than no longer have a tax base sufficient to support the area's government. I wonder when this will be recognized?

I believe that it is a requirement that the reorganization plan be 'sustainable'. Government will be downsized as necessary. Contracts rewritten. Labor agreements finally at long last reset to remove impediments to efficient operation [[work rules, etc.) Pension plans reworked to protect current pensions to a great degree [[loss probably only of pennies on the dollar).

I don't think there's any reason to think it can't be done. The only reason it hasn't been done is politics and labor law. Politics resists change and pushed problems to future. Labor law just doesn't have provisions to modernize the work relationship. They still written for GM and US Steel in the 1940s. They really need an overhaul to protect all workers, not just the favored 2%.

[Cincinnati_Kid]

Because someone else is get 6/5's of the $100,000. Do you think its fair that there are pensions over $100,000 for government workers?

No, it's not fair. Most of those people didn't do anything special to deserve it, while most other people in private sector jobs worked their _ss off for theirs.

[Don K]

Hockey arenas ... are investments in the future of our citizens.

Wrong, wrong, wrong. Nobody has been able to show that publicly-funded arenas and stadiums result in a net benefit to cities or regions. Numerous studies have shown that they're a net drag, siphoning off money that could be spent on things that truly matter to the future of the region, like schools and transportation.

Publicly-funded sports facilities are welfare for billionaires, pure and simple.

[Wesley Mouch]

Wrong, wrong, wrong. Nobody has been able to show that publicly-funded arenas and stadiums result in a net benefit to cities or regions. Numerous studies have shown that they're a net drag, siphoning off money that could be spent on things that truly matter to the future of the region, like schools and transportation.

Publicly-funded sports facilities are welfare for billionaires, pure and simple.

I've never seen a credible study either. But I can tell you that much of Downtown Detroit's success would not have happened with the Wings in Auburn Hills [[where they were headed). Sports teams in the City do help, IMO.

[EastsideAl]

The answer to all 3 is the same: no one with money or in power gives a crap about working people.

Workers are, however, convenient targets for their disdain, a good place to extract a little money to cover their asses, and work very well to divert the focus from their own massive failings.

[MizMotown]

I've never seen a credible study either. But I can tell you that much of Downtown Detroit's success would not have happened with the Wings in Auburn Hills [[where they were headed). Sports teams in the City do help, IMO.

Who does it help when the main money maker of the deal also buys a huge chuck of land around it to make more business in which they will get more money. Maybe there will be some part-time seasonal work starting at $7.40 an hour for a few lucky pheasants.

[Wesley Mouch]

The answer to all 3 is the same: no one with money or in power gives a crap about working people.

Workers are, however, convenient targets for their disdain, a good place to extract a little money to cover their asses, and work very well to divert the focus from their own massive failings.

Thanks for the explanation. I always wondered why Bill Gates stepped down from Microsoft. Now I know.

[Wesley Mouch]

Who does it help when the main money maker of the deal also buys a huge chuck of land around it to make more business in which they will get more money. Maybe there will be some part-time seasonal work starting at $7.40 an hour for a few lucky pheasants.

Who does it help?

1) It helps the property owners who sold the land at increased prices,

2) It helps the workers who are employed. [[Don't we all want jobs in Detroit, not Auburn Hills),

3) It brings several hundred million dollars a year of economic activity to your door, not someone elses,

4) It helps those on the path of travel by shifting activity to the Buddy's Pizza in Dearborn where the Wayne resident stops on the way to the Arena -- rather than helping the Troy or Auburn Hills business,

5) It helps the image of Detroit nationally -- as a place where things happen. Instead of being a place that's famous for being avoided. I think Ford Field and Comerica Park being shown on national TV as part of Downtown Detroit is very positive for our image.

6) It helps give those who like to whine about anyone else's success something to bitch about. I don't care for Mike Ilitch, but I don't care if he makes money, so long as he does so in Detroit. I'm glad we can have someone with whom we can argue about how to develop Detroit -- rather than watch him develop Auburn Hills.

[Dan Wesson]

How much tax money is going to be used to sweeten the deal up front and for how long and how much are the insuing tax breaks to be?

[Bham1982]

Hockey arenas and other economic development are investments in the future of our citizens.

How is a hockey arena "economic development"? Is there an economist on earth who thinks a taxpayer subsidized hockey arena is "economic developmment", especially when it's just a relocation of an existing team in an existing taxpayer subsidized arena?

If Detroit refused any subsidies for Illitch, what would be Illitch's possible moves? He could 1. build the arena himself, or 2. do nothing and stay in the Joe. In either case, the city wins.

[jt1]

Economic impact aside, I wouldn't say the city wins with '2. do nothing and stay in the Joe'.

Keeping the Wings at the Joe would impact any ability to expand Cobo or add development that will complement Cobo and that large, dirt lot at 75 and Woodward would stay that way as long as Ilitch is still trying to get support for an area.

I would't call either of those things 'wins'

[Bham1982]

Economic impact aside, I wouldn't say the city wins with '2. do nothing and stay in the Joe'.

Keeping the Wings at the Joe would impact any ability to expand Cobo or add development that will complement Cobo and that large, dirt lot at 75 and Woodward would stay that way as long as Ilitch is still trying to get support for an area.

I would't call either of those things 'wins'

I would call it a huge win. You just saved the taxpayers many hundreds of millions of dollars, which could be used for whatever. The benefits of having the Wings are the same, whether on Jefferson or on Cass.

[jt1]

I would call it a huge win. You just saved the taxpayers many hundreds of millions of dollars, which could be used for whatever. The benefits of having the Wings are the same, whether on Jefferson or on Cass.

Correct, if you ignore all the other variables. Ilitch will hold all of his property hostage until this gets done. That means no hope of development behind the Fox, no hope of development at 75 and Woodward, no hope of development near Motor City Casino, etc.

It was simply a dollars to dollars comparison with no other variables I may agree but Ilitch has stacked the deck in his favor to allow his company to extort the city. Sad but true. Or things can remain as they are and drunk Tigers fans will have a ton of surface lots to trash and piss all over.

People could save themselves tons of money buy living in a $5,000 home near city airport but they choose not to. There are always other variables beyond just the dollars. You know that but choose to ignore it

[Wesley Mouch]

How much tax money is going to be used to sweeten the deal up front and for how long and how much are the insuing tax breaks to be?

This has been asked and answered -- and I don't recall the details. But this is not 'hundreds of millions of taxpayers dollar' being diverted. If its like Comerica, JLA, or Ford, its mostly bonds paid back by the stadium by ticketholders. I'm sure some tax money will be used -- but to call this a giant subsidized arena is misleading to wrong.

As to tax breaks, I'm not aware of any tax breaks -- except that because the stadiums are owned by the Stadium Authority, they are not taxpaying entities. So there's no loss, unless you assume that the land would have otherwise been put to productive uses.

The idea that there are people starving because money's being given to Ilitch is not much more than a talking point. The arena would be a public/private partnership using little tax money to borrow money to sustain the current economic activity of the sports and entertainment areas.

Ilitch will NOT stay in JLA much longer. Its at end-of-life. He would probably build in the city. But if his children sell the company, the new owners might have different ideas.

[EastsideAl]

Thanks for the explanation. I always wondered why Bill Gates stepped down from Microsoft. Now I know.

Huh? Non-Sequitur?

[downtownguy]

Correct, if you ignore all the other variables. Ilitch will hold all of his property hostage until this gets done. That means no hope of development behind the Fox, no hope of development at 75 and Woodward, no hope of development near Motor City Casino, etc.

Got news for you. He's been doing that for the last 25 years.

[Dan Wesson]

How much tax money is going to be used to sweeten the deal up front and for how long and how much are the insuing tax breaks to be?

This be what I be talkin' about...

http://www.npr.org/2013/12/13/250846...ot-be-worth-it

any real numbers put out yet?