Fiscal director says Detroit mayor’s proposed budget needs work, city ’skating on thin ice’

Fiscal chief: Detroit mayor’s budget needs work

DETROIT — Mayor Dave Bing is overestimating future revenue for cash-strapped Detroit in his proposed budget and is understating how much the city’s deficit will be, according to the City Council’s fiscal analysis director.

In a report to the council on Thursday, Irvin Corley Jr. said revenues in Bing’s $2.9 billion budget may be overstated by $7.3 million. The council’s Fiscal Analysis Division also isn’t confident that changes and measures to reduce spending in fiscal year 2010-11 can be achieved.

“It is likely the city will be skating on thin ice to make it through the year in balance,” Corley wrote. “In other words, there is little room for error.”

Bing presented his budget to the council earlier this month. The nine-member board will review it for approval before the start of the July 1 fiscal year.

After being elected mayor in a special runoff election last May, Bing expressed concern that the city could go broke and wind up in receivership. Detroit’s financial picture is less dire now, but still deep in the red.

Bing’s budget is down from last year’s $3.7 billion budget. It includes cutting the number of city workers, contracts and bank accounts, in addition to closing an aging power plant and privatizing operations of the city’s airport.

It also would reduce a budget deficit of more than $300 million to $85 million.

Corley called the new deficit figure “fairly reasonable,” but said it’s still understated by $39 million. His department estimates the deficit at $124.5 million.

Proposed restructuring or consolidations of city departments and services saves only $2.3 million and “does not go far enough to streamline and reduce current city services to reduce cost going forward,” according to Corley, who also said the city’s budget should be monitored monthly, starting in July.

Bing defended his budget plan following Corley’s report to the council, saying it “is based on good business, and not bureaucracy.”

“Council is using the same broken budget-by-budget analysis of years past, rather than the dollars spent in 2009/2010 and building their 2010/2011 based on those false assumptions,” Bing said in an e-mailed statement.

“The budget is transparent, absent the politics and number games of past budgets.”