Hamtramck will run out of money by the end of January and won’t be able to pay salaries or pay its bills. On top of that, the city will be $3.3 million in the hole.
The city is asking the state to allow it to file bankruptcy in order to tear up labor contracts and switch to a less expensive health insurance plan for employees. The state has told the city no way and instead suggested the city take a loan.
With a new governor coming to power, it’s anyone’s guess what position the state will take with Hamtramck. It could be that Gov.-Elect Rick Snyder won’t have much sympathy for financially distressed cities. Hamtramck isn’t alone in facing a cash shortage and budget deficit.
There are dozens and dozens of Michigan cities in deep trouble – most notably Detroit.
It’s possible that Snyder will simply force distressed cities to merge or at least merge services. For Hamtramck, that would be devastating. Can you imagine what life in the city would be like if we were forced to merge with Detroit and/or Highland Park?
It won’t be pretty.
But there is something city officials, residents and labor unions can do to save our city. City Councilmembers can raise our property tax millage rate by 2.3 mills without first getting voter approval.
So far, this council has refused to take that step.
Not only that, the council needs to at least ask voters to approve a millage increase beyond that 2.3 mills. We need an extra millage to plug our budget deficit.
Next up, our city employee union members need to look at reality. No one is bluffing about the city’s finances. Getting a state loan to tide us over for another year will only put off the financial problems facing us today.
A major portion of our financial woes are the high cost of health insurance for employees and minimum staffing requirements in the police and fire departments. We’re not pointing fingers here and don’t mean to sound like it’s time to bash city employees.
Heck, if we were king of the universe, police and firefighters would be each paid a huge salary and be allowed to retire comfortably at an early age.
But we don’t have that power. The unions are the only ones who have the ability to save their own jobs.
If they do indeed want to keep their jobs, there must be contract concessions. Just about every worker in America has been hit with pay and benefit cuts. The American economy – and particularly the Michigan economy – is in the dumps.
It’s not been this bad since the Great Depression in the 1930s. Economists say it will be several years if not longer before we see a turnaround.
In the meantime, our community must be willing to make sacrifices. If we don’t make our own decisions, there are those in the state who won’t hesitate to step in.
Simply put, it’s up to residents, city officials and city employees to save our city.