In an age of trillion dollar-plus deficits, one million dollars might not seem like a whole lot of money. But the city of Detroit, of all places, should know that’s not exactly chump change (via Bloomberg):
In late February, cash-strapped Detroit received a $1 million check from the local school system that wasn’t deposited. The routine payment wound up in a city hall desk drawer, where it was found a month later.
This is the way Detroit did business as it slid toward bankruptcy, which it entered July 18. The move exposed $18 billion of long-term obligations in a city plagued by unreliable buses, broken street lights and long waits for police and ambulances. Underlying poor service is a government that lacks modern technology and can’t perform such basic functions as bill collecting, according to Kevyn Orr, Detroit’s emergency manager.
“Nobody sends million-dollar checks anymore -- they wire the money,” said Orr spokesman Bill Nowling. Except in Detroit.
“We have financial systems that are three, four, five decades in the past,” Nowling said. “If we can fix those issues, then we’ll be able to provide services better, faster, more efficiently and cheaper.”
Detroit doesn’t have a central municipal computer system, and each department bought its own machinery -- much of which never worked properly, according to Orr, 55, who took over in March. The last such acquisition, 15 years ago, was of a system based on Oracle Corp. (ORCL) technology that wasn’t fully put to work.
I suppose it’s easy to misplace a million dollar check when the city government doesn’t even have the financial institutions in place to record, process, and/or confirm payments are actually received. How many other checks have bureaucrats accidently “misplaced,” I wonder? Sure, getting Detroit up to speed technologically is one way to improve the city’s long-term economic outlook but the city also suffers from a series of systemic problems that aren’t easily going away. One-party rule has stunted progress for generations, exploding the city’s generous and unsustainable pension and benefit obligations. Perhaps, then, the time has finally come for a different political party to hold the keys to the city for a while.
The tax-and-spend, business-as-usual approach just isn’t working.
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