Detroit City Privatization:
Don’t Believe the Hype

Apr 18, 2005

Detroit city officials and the news media have been filled with reports about how over-bloated the Detroit city government is. They blame the 200 million dollar deficit on the size of city government. Mayor Kwame Kilpatrick and the city newspapers constantly report that Detroit has one city employee for every 53 residents, and a total of 42 separate city departments. Other cities of comparable size have far fewer. Indianapolis, they say, has one employee for every 192 residents, and only five departments.

Back in the 1990s, Indianapolis then-mayor Goldsmith proposed shrinking city government as a way to cut deficits. He proposed closing city departments, and hiring private companies to do the work that had been done directly by the city–often GIVING city equipment and facilities to those companies.

Years later, the city budget is no smaller–and it’s filled with scandal on top of it. The new mayor says that the city is 57 million dollars in debt, and needs to be cut further.

Privatization is NOT more efficient. It does NOT save governments money. It costs governments MORE money, for FEWER services. Contractors take over city resources, take their fees, take a big chunk right off the top for themselves, and then cut back all sorts of city services that used to be taken for granted–because contractors exist for profit, not to provide services to city residents.

So why is Detroit pointing to Indianapolis as the big example of how to do things? The only thing it shows is how corporations can grab public money and make huge profits!

The true purpose behind privatization proposals is not to cut deficits or to increase efficiency. It’s to hand taxpayer money over to private corporations, pure and simple.