Congressman Dan Kildee

Representing the 5th District of Michigan

Congressman Dan Kildee Calls for New Municipal Finance System to Help Address Insolvency Facing America’s Great Cities

Jul 19, 2013
Press Release

Like Detroit, Kildee Raises Increasing Threat of Municipal Fiscal Failure in Other U.S. Cities with Federal Reserve Chairman Ben Bernanke

 

As Detroit becomes the largest municipality to file for Chapter 9 bankruptcy, Congressman Dan Kildee (MI-05) today reiterated his push for new ways to support America’s great cities facing dire financial straits, something he has continually advocated for. On Wednesday – a day before Detroit declared bankruptcy – Congressman Kildee questioned Chairman Bernanke in person when he came before the House Financial Service Committee on ways that the Federal Reserve is prepared to address the systemic failure of U.S. cities.

 

I would ask if you would think about how you would advise Congress or how the Fed itself might pursue policy that would have the effect of potentially avoiding – but certainly mitigating – the economic effect of municipal financial failure,” Congressman Kildee said at Wednesday's hearing.

 

In a letter delivered to Chairman Bernanke Wednesday after his testimony, Congressman Kildee again specifically referenced the dire financial situation in Detroit.

 

When Chairman Bernanke last appeared before the committee earlier this year, Congressman Kildee also raised the issue of municipal insolvency and the threat it poses to the national economy. In the hearing, he argued that states and local governments are ill-equipped to overcome their current financial woes by themselves as a result of decades of decline.

 

“In my work across the country, this is something much bigger than a failure of management, but a structural failure,” Congressman Kildee said to Bernanke on Feb. 27th. “Cities failing will be a national problem, one way or another, and I suggest perhaps at a different juncture we might pursue some thought about how the federal government might intervene,” Congressman Kildee stated in February.

 

In a statement in reaction to yesterday’s announcement that Detroit had filed bankruptcy, Congressman Dan Kildee said, “while Detroit’s problems may be extreme, they are certainly not unique,” pointing out that many other cities in Michigan and across the country are also “increasingly facing insolvency that requires us to rethink the way we support our cities.”

 

In particular, the city of Flint – the seventh largest city in Michigan which Congressman Kildee represents – faces its own financial troubles as it continues to deal with decades-long population loss and a declining tax base.

 

“Today’s announcement makes it clear that we can no longer sit idly by as America’s great cities continue to decline. As a state and country, we must find new ways to lift and strengthen our nation’s legacy cities,” Congressman Kildee said.

 

“Our system of municipal finance is broken. States and the federal government need to rethink the way they support cities and metropolitan areas,” Congressman Kildee said. “For example, community development block grant programs, which Republicans in Congress have proposed cutting by over 40 percent, is the wrong approach that would be damaging the vitality of many U.S. cities, in some cases even exacerbating their decline. It’s time that we start thinking about the long-term sustainability and funding mechanism for cities and suburban areas that are the powerhouse engines of our economy.”

 

Congressman Kildee has an extensive background in housing policy and land use issues and has made revitalizing American cities like Flint and Detroit a top priority in Congress. Recently, he helped to secure $100 million in federal funds for five Michigan cities – including Detroit, Flint and Saginaw – to help remove thousands of blighted and abandoned structures.

 

In 2002, as Genesee County Treasurer, Congressman Kildee founded the Genesee County Land Bank – Michigan’s first land bank – to help stabilize neighborhoods and redevelop abandoned properties in Michigan. The successful lank bank, which is responsible for over $100 million in redevelopment in Flint, has helped to inspire nearly 100 other communities to start similar models to help create opportunity and foster development.