12:47pm

Wed December 14, 2011
Economy

Michigan Town Grapples With Shrinking Public Sector

Tammi Warren has lived on the same winding street in the Detroit suburb of Inkster, Mich., all her life. But as she drives down the block in her Ford pickup, Warren points to several houses on her street that stand vacant, casualties of the housing market collapse.

Vacant houses mean less tax revenue for the city, and less revenue makes it harder for Inkster to provide basic city services.

"[The] city of Inkster has eliminated 38 positions," says City Treasurer Mark Stuhldreher. "It's about 25 percent, roughly, of the workforce."

The situation in Inkster illustrates a larger paradox currently at work in the labor market: While the private sector is slowly adding jobs, the public sector continues to shed them. The federal government's most recent labor report shows payrolls at private employers growing by 140,000 in November, while government agencies cut 20,000 jobs.

When I visited Inkster's City Hall to interview Stuhldreher, there was no one behind the information desk, and the city clerk's office was empty. The only sign of life in the lobby was the man sitting behind the cashier sign taking payments for tax and water bills.

Stuhldreher says about 70 percent of the city budget is spent on people's salaries and benefits. So this month, Inkster laid off 14 police officers in an effort to make ends meet — that's about 20 percent of the department.

At Franchesko's diner, Inkster resident Darrel Osborne says he's troubled by news of cutbacks in the police force.

"Inkster police is like our family," Osborne says. "We come to the restaurant; they make you feel safe to eat."

Osborne points to the restaurant's new security cameras, which the owner put in when news of the police layoffs hit. The diner is a favorite spot for Inkster police, but with fewer officers on the force, there are fewer of them coming in for the $2.25 breakfast special.

Osborne says the restaurant isn't the only place feeling their absence.

"When I ride through the neighborhoods in Inkster, you used to see them out in their cars patrolling the areas and everything," he says. "You don't see that no more, due to the layoffs."

But Inkster is still faring better than some Michigan cities. Pontiac has dismantled its entire police department, contracting the work out to the county sheriff, and it's about to get rid of its fire department as well.

Bettie Buss is a municipal finance expert with the Citizens Research Council of Michigan. She says higher pension and health insurance costs have also added to the challenge.

"Unless property taxes increase, which means that the value of properties increase dramatically, the situation's not going to change," she says.

Buss says that in the meantime, cities will look to revamp pension plans and collective bargaining agreements. Sharing services and even merging communities are also options for local governments looking to stay in the black. But in the end, there appear to be few good alternatives to laying off public workers.

Copyright 2011 Michigan Radio. To see more, visit http://michiganradio.org/.

Transcript

LYNN NEARY, HOST:

You're listening to ALL THINGS CONSIDERED from NPR News.

These days, trends in employment are heading in two opposing directions. The private sector is slowly adding jobs, while the public sector continues to shed them. According to the federal government's most recent labor report, payrolls at private employers grew by 140,000 last month. At the same time, government agencies cut 20,000 jobs.

Sarah Hulett of Michigan Radio visited the community of Inkster, Michigan, to find out more about the impact of public sector job loss.

SARAH HULETT, BYLINE: Tammi Warren has lived on the same winding street in this suburb of Detroit all her life. She grew up in the house next door, and she and her family members own four tidy bungalows right in a row.

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HULETT: But as she drives me down the block in her Ford pickup, Warren points out the casualties of the housing market collapse.

TAMMI WARREN: These two right down here on the right-hand side, these are vacant. These other two that are right here are rental houses. We've got another one that's vacant here. This one has been vacant for a while.

HULETT: And vacant houses mean less tax revenue for the city.

MARK STUHLDREHER: The city of Inkster has eliminated 38 positions. It's about 25 percent, roughly, of the workforce.

HULETT: That's the city treasurer, Mark Stuhldreher. When I walked into city hall to interview him, there was no one behind the information desk, and the city clerk's office was empty. The only sign of life in the lobby was the man sitting behind the cashier sign, taking payment for tax and water bills. Stuhldreher says about 70 percent of the city budget is spent on people: salaries and benefits.

STUHLDREHER: You can't automate a police department like you can an auto factory.

HULETT: So this month, Inkster laid off 14 police officers. That's about 20 percent of the department.

At a diner called Franchesko's, residents like Darrel Osborne say they're troubled by the news.

DARREL OSBORNE: Inkster police is like our family. Like, we come to the restaurant, they make you feel safe to eat.

HULETT: Osborne points to the restaurant's new security cameras, which the owner put in when news of the layoffs hit. The diner is a favorite spot for Inkster police, but with fewer officers on the force, there are fewer of them coming in for the $2.25 breakfast special. And Osborne says the restaurant isn't the only place where their absence is felt.

OSBORNE: When I ride through the neighborhoods of Inkster, you know, you used to see them out, you know, in their cars, you know, patrolling the areas and everything, and you don't see that no more due to the layoffs.

HULETT: And Inkster is actually faring better than some Michigan cities. Pontiac has dismantled its entire police department, contracting the work out to the county sheriff, and the city is about to get rid of its fire department as well. Bettie Buss is a municipal finance expert with the Citizens Research Council of Michigan. She says higher pension and health insurance costs have also added to the challenge.

BETTIE BUSS: And unless property taxes increase, which means that the value of properties increase dramatically, the situation's not going to change.

HULETT: Buss says, in the meantime, cities will look to revamp pension plans and collective bargaining agreements. Sharing services and even merging communities are also options for local governments looking to stay in the black. But in the end, there appear to be few good alternatives to laying off public workers. For NPR News, I'm Sarah Hulett. Transcript provided by NPR, Copyright National Public Radio.