In an exclusive interview with The Michigan Chronicle, U.S. Congressman Hansen Clarke shares his plan to get $10 Billion in funding Detroit but says the city also needs financial reform for sustainable growth
It’s no secret that many Detroiters, despite the city’s grim financial situation, are against the state intervening on the city’s operations in any form, whether through an Emergency Financial Manager or a nine-member financial advisory board. But few of these Detroiters are offering alternative solutions to an unavoidable problem.
U.S. Congressman Hansen Clarke (D-MI13) has some ideas for a fix. In involves creative funding along with some fundamental shifts in voter involvement. For some time now Clarke has been looking to the feds instead of the state for a hand helping Detroit climb out of the fiscal hole it sits in today.
“It’s doesn’t matter if the consent agreement is legal because it’s not effective,’ He said regarding the legal showdown between Mayor Bing and the city’s head lawyer, Krystal Crittendon. “What the city needs is growth. You can’t cut costs and lay off people in times like these. We need streetlights, police officers, schools open, and money to train people to get jobs,” he added.
In March Clarke introduced the Detroit Growth and Stability Act, and explained in a Detroit Free Press Op-Ed how the bill would secure $500 million in federal funding to Detroit.
That bill didn’t get very far, but he said it built momentum around another bill he introduced in September, one that sets to make $10 billion in federal tax revenue available to the city to use over the next five years.
“It’s significant,” Clarke said about the bill, H.R. 2920. “This could do more than fix the financial crisis it would grow the city.
Clarke is still forging H.R. 2920 in the House (formerly called the Detroit Jobs Trust Fund). Once in effect, it would funnel all federal taxes from Detroit businesses and pool them into a separate fund that would be overseen by the U.S. Department of Treasury or an agency authorized by that department. The collected re-assigned tax dollars would ultimately be available in the city’s budget.
According to Clarke’s research, Detroit businesses pay approximately $2 billion in federal taxes every year. For global businesses like GM, it would only take taxes paid by operations within the city. The bill proposes that these taxes be re-routed from the feds to Detroit for five years adding to a total of $10 billion. And that’s a low estimate, Clarke says.
But it won’t happen overnight. “It will take time,” Clarke said. “We could be working on this for the next few months.”
The bill is set to make the case that Detroit can make it without help from the state, but it’s a matter of waiting. Clarke said avoiding any state intervention is paramount, calling Public Act 4 “unacceptable”.
Still, if all goes according to Clarke’s plan and the bill passes the House and Senate and is signed into law by the President, what happens five years from then when it expires and suddenly $2 billion in aid disappears from the city budget? Will things spiral back to the way they are now?
Clarke is betting the power of the people to start holding their elected officials more accountable will spur reform through elections before then. But he believes that operations can’t keep on the way they are in the city.
“The city has to change the way it’s handling its money,” he said. “We do need reform. We need financial controls and more efficiency.”
Clarke said he discovered in a recent conversation with a U.S. energy official that Detroit wasn’t proactive in procuring grants that could keep more streetlights on. “The U.S. Department of Energy told me the city didn’t apply for several energy grants available to them,” he said. “I can make funds available but I can’t apply for the city.”
How do we ensure financial reform? There needs to be some deeper changes to the political system, Clarke says. No one can force it. He’s a believer in old-fashioned democracy.
“Ultimately, the only way to reform is if people demand it. It’s up to the people,” he said. “When the public demands reform, [elected officials] will have to make those changes to stay elected.”
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