Public-private partnerships could be a lifeline for cities

By Kent Rowey

Detroit is fighting for its fiscal survival. Over the last four years, the city has spent $100m (£65m) more each year than it has collected. Long-term liabilities are estimated to be as high as $20bn. Gov Rick Snyder of Michigan installed an emergency manager, who most assume is preparing for a Chapter 9 filing, which would be the largest municipal bankruptcy in US history.

In May, the manager, Kevyn Orr, was considering selling parts of the permanent collection at the Detroit Institute of Arts to pay creditors. Orr later backed off that threat, but no doubt he wanted to scare city fathers into getting serious about averting financial disaster. But new worries followed that he would have to unload the city’s collection of 62 classic cars.

Detroit’s plight may be extreme, but its problems are increasingly common in cities across the US. Municipalities are struggling to make public payroll, maintain basic services or meet pension fund obligations. Many of the hard choices Detroit has to make will be repeated in towns in the midwest, Rust Belt, California and the north east…

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