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Idahoans can learn from Detroit and other bankrupt cities

Idahoans can learn from Detroit and other bankrupt cities

Erik Makrush
December 10, 2013
December 10, 2013

Remember your reaction to the city of Detroit filing for bankruptcy? I recall thinking “what would my grandfather and father have thought about the situation?”

When I was a tike, I would sit next to Grandpa Faust listening to his stories about working in the “car business” and attending the great car shows in Detroit—the center of the American car industry in the 1960s. In those days, Detroit was vibrant and bustling with success … fast forward to 2013 and just the opposite is true. Bankrupt.

There is plenty of blame to go around as to why cities (and counties) are filing for bankruptcy. Unfortunately, I am sure we have not seen the end of this trend. The underlying reasons are out of control spending, excessive debt loads due in part to pension obligations and increased property taxes resulting in businesses and high net worth individuals relocating away from area. So, what can be done?

Local leaders need to adopt policy changes to reduce the cost of government and accompanying taxation.

- Reduce the amount of land owned by the government. We all like the neighborhood park, but far too often the number of parks, golf courses and commercial buildings owned by local government is astounding. These should be sold to private operators or civic organizations resulting in reduced liability and upkeep costs, as well as bring some of these properties back onto the tax rolls, which will lower the tax burden for all residents.

- Garbage collection, water and wastewater management should be either privatized or at least competitively contracted on a regular basis to ensure the best price is obtained.

- Public works and public safety can be combined with neighboring cities or with the county to reduce costs.

- Road maintenance and snow removal can be privatized thus eliminating the need for overtime payroll and additional costs for retirement, insurance, payroll taxes, etc.

- Eliminating urban renewal revenue allocation areas will reduce the temptation of pet project spending without voter approval of bonds.

If local, elected leaders in Idaho start taking bold moves by combining services and privatizing select services, the trend of increasing budgets and tax levies can be reversed.

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