Gov. Snyder’s Detroit Victory Dance Premature

Gov. Rick Snyder is touting his handling of the Detroit bankruptcy to media outlets around the country. While the bankruptcy went smoothly compared to other municipal proceedings, there is a difference between emerging from bankruptcy and fixing the city government’s problems. Whether Detroit will be successful remains to be seen.

The city emerges from bankruptcy having reduced its debt burdens, including large cuts to its retiree health insurance and to its pension benefits. City debts had been looming to take two-thirds of city operating revenue.

While easing these burdens was necessary, there is a lot more that needs to be done before the city government has officially turned the corner. It needs to get its day-to-day operations in order.

The city’s plan needed to be deemed “feasible” to exit bankruptcy. The judge’s expert in determining whether the proposal meets this requirement gave it good marks, but warned about city operations. The city needed better human resources and information systems, the basics of service provision. She notes: “If the City is to counteract the vortex of underachievement that has defined Detroit, City leadership must make a long term, concerted effort to maintain the momentum needed to ensure effective City services.”

She pins the city’s hopes on successful implementation of the reform and restructuring initiatives designed to invest in needed equipment, staff and systems.

But it remains to be seen whether the state is able to implement these improvements. 

Reports highlighted that progress is being made but not complete. The strings attached to the state bailout may or may not work to ensure that Detroit gets its ship in order.

So until Detroit is able to live within its revenues and provide basic quality services to its residents, we won’t know whether Detroit has been fixed.