Liberal Economist: 'Mostly White' Oakland County Deserves the Blame For Detroit's Problems

County official: 'He doesn't understand what he is talking about'

In a recent Detroit Free Press op-ed, University of California-Berkeley Professor Robert Reich places the blame for the city of Detroit’s bankruptcy on the “mostly white” residents of Oakland County.

“But Detroit is really a model for how wealthier and whiter Americans escape the costs of public goods they would otherwise share with poorer and darker Americans,” Reich wrote. “ … But one thing is for certain: A very large and prosperous group close by won’t sacrifice a cent — the mostly white citizens of neighboring Oakland County.”

The reaction of one Oakland County official was that Reich, a former U.S. Secretary of Labor, didn’t know much about his chosen topic.

“That piece is clearly misinformed,” said Robert Daddow, deputy Oakland County executive. “He doesn’t understand what he is talking about.”

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By all accounts, the state and Oakland County are major stakeholders in Detroit. Here’s some things Reich overlooked about how county and state taxpayers help fund Detroit.

No. 1: People who work in the city but live elsewhere — such as Oakland County — pay a city income tax. That income tax for non-residents is 1.2 percent, compared to the 2.4 percent that residents of Detroit pay. The city income tax brings in $248 million and accounts for 19.2 percent of the city’s revenue.

No. 2: Detroit has a special deal with casino revenues. There are 22 other cities in Michigan that have casinos operating within their boundaries, but Detroit is the only city that can collect a “wagering tax” from casinos. That amounted to $181.4 million in 2012, or 13.5 percent of the city's revenue. Many of those bets, undoubtedly, were placed by Oakland County residents.

No. 3: Detroit is budgeted to receive $140.5 million in money taken from sales tax revenue that is collected from residents all across the state — including Oakland County — in the form of revenue sharing, which will account for 14.1 percent of the city’s revenue in fiscal 2015.

No. 4: Oakland County and its residents financially support several things that help the region, including the city of Detroit. Oakland County taxpayers voted to support a three-county millage that goes to fund the Detroit Zoo, which is located within Oakland County in the city of Huntington Woods, as well as a millage for the Detroit Institute of Arts.

Oakland County has also given $500,000 a year to Automation Alley for the past 14 years. Automation Alley is a technology business association that supports that industry, including businesses and institutions located in the city of Detroit.

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See also:

State Budget Shifts Extra Revenue Sharing Funds to Detroit

Special Deals Allow Detroit To Collect Hundreds of Millions In Extra Revenue

The Winners and Losers In Detroit Bankruptcy

Agenda For Detroit: What Role State Government Should Play After Bankruptcy

Detroit Should Look to Pontiac

Michigan Taxpayers Have Already Bailed Out Detroit

More Money, Higher Taxes Not the Solution for Detroit

Detroit Still Sending Tax Notices 15 Years After Company Closed

Is the Problem In Detroit Really a Lack Of Revenue?


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