Between 2005, when the new city charter was implemented, and 2009, the City Council and the mayor, working with the city manager, adopted four balanced budgets. Those budgets realistically spent according to the revenue. City government was living within its means.
Now, there may be honest disagreement with how money was sometimes spent, like the money spent on crossing guards to make sure the city’s students are safe on their way to school, which cost $5,000 a year or so. Others cite the money spent to investigate a council member’s residency, the DDA TIFA district, the events coordinator, or code enforcement officers. Those disagreements, which are policy and priority disagreements, have to be respected.
However, facts are facts, and the fact is, in those budgets spending was consistent with revenue. In fact, during this brief period, the city was able to create and finance a “rainy day fund.” For the first time in the history of the city we had a council and administrator that did not spend every nickel they found laying on the ground. Two million dollars was saved during this period in the “rainy day fund.”
A lot has happened since the last budget was adopted in May of 2009. The sub-prime market imploded. GM and Chrysler declared bankruptcy, unemployment has skyrocketed, American Axle has moved on and homes are being foreclosed upon as values drop. The nation is now in the grips of a Great Recession. Every city and village in Michigan has been affected by the economic crisis. Events are being cancelled, police officers are being laid off, libraries are being closed and voters are being asked to approve millage increases.
Nothing done in the previous four budgets adopted by this city has caused or aggravated the current crisis. In fact, the conservative budgeting of the past four years has mitigated the situation for the time being as the current majority of council begins to spend our way to our last dime.
Spending for the year must match the revenue for the year. If it doesn’t, spending has to be decreased to match the revenue, or revenue has to be increased to equal spending. In the current budget adopted by the city on Tuesday night, what they propose to spend does not match the revenue for the year. They have decided to pay the light bill, so to speak, out of the savings account hoping against all hope something changes.
Council must be honest and cut spending, and if they don’t want to cut spending, then they must raise revenue, or some combination of the two. The problem is likely to be worse next year. Now is the time to make the difficult choices, like every other city in the state. Spending from the “rainy day” fund is no solution. Once the money is gone, and it will go quickly, the problem that spending does not currently match revenue will remain, and our options will be even more limited than they are now.
And given the state of local finances, wouldn’t it be nice to have the full energies of the people we’ve elected focused on guiding Hamtramck through this difficult time. Our elected officials, three of whom have been in office less than six months, should pledge not to seek other elective offices until their current terms expire.
We’ve elected them to lead the city. We didn’t vote them in to office to provide them a platform they might use to seek a better paying elective office, and at least, you’d think they’d serve at least one full term before asking for a promotion. The city needs their undivided attention in this crisis as council members not candidates or potential candidates.
Solving the fiscal problem in any city in the state is not an easy proposition, but most cities are aggressively cutting spending to reflect revenue. There is no reason why Hamtramck should not be among those rank. I have confidence this group of people can make the difficult choices if they chose to, but I have less confidence they will chose to make those choices.
That apparent fact makes me sad, more than anything else.
(Editor’s note: Mr. Klein is a former Hamtramck City Councilmember.)