Detroit stands to lose $174 million due to population drop

Detroit fights census figures
City could lose $174M under lower count; Bing challenges laws

Darren A. Nichols / The Detroit News

Detroit — The city stands to lose $174 million because its population has plummeted below 750,000 residents.

That's the threshold to qualify for federal funding and in 25 state laws that give special powers to cities of that size. Mayor Dave Bing is working with legislators to change the laws and challenging census figures showing the population fell 25 percent to 713,777 since 2000.

If the numbers and laws don't change, the city could lose $15 million in revenue sharing; $109 million in income taxes and $50 million from 5 percent utility taxes that benefit the Detroit Police Department, Irv Corley, the City Council's chief fiscal analyst, told the panel Friday.

But council members and Bing hope for a successful challenge — even if the population count will remain the same for purposes of congressional redistricting. The city still can seek adjustments to qualify for federal and state money.

Continued at: http://detnews.com/article/20110409/...#ixzz1J2qPGf5B

The city doesn't stand to lose anything. It's been getting more than it's share for a few years until the census found it's population was below the required level to get the extra $174M; and wanting the laws changing to accommodate the newly found conditions makes a mockery of law. As a federal and state taxpayer, if Detroit wants more of my money it should acquire a higher level of population to qualify for it in a proper manner; not by manipulation of laws and population figures. What's the point in having to qualify for federal and state money if you can "seek adjustments" if you don't like what you get. No wonder the country is going bankrupt.

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The city doesn't stand to lose anything. It's been getting more than it's share for a few years until the census found it's population was below the required level to get the extra $174M

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If you were getting something, and now you aren't, most people would say you have lost something. The question of whether you were entitled to get it before or should continue to get it because you used to is separate.

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wanting the laws changing to accommodate the newly found conditions makes a mockery of law.

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Most people want laws to accommodate to newly found conditions. And it is rather normal for entities of all kinds to try to get laws changed in ways that are favorable to them.

Nonetheless, even if the city is able to get some such changes, I very much doubt that they will be able to offset all the revenue loss which could result from the population loss. But it would be absurd for Bing not to try.

Of course Detroit will lose more federal funding. It will lose more of this population keep decreasing? It's time merge Detroit with the suburbs and get more federal funding.

I agree with your logic mwilbert and it does highlight the problem. Governments know that if they don't meet the set conditions, or overspend, they can always find a weak liberal ear that will give them somebody elses money, or money they print, or money they borrow to be paid back by their children.
So why should they bother to control costs when they know they will always be rewarded for failing? As for Detroit we are going to claim federal and state fnancial support as though our population is higher than 750,000 whereas over the next 10 years it will probably drop to around 550,000. So our financial gain will be somebodies loss.

wouldn't be surprised if the city has lost that much money some years just due to graft and corruption

At least at the state level, the population numbers for the laws are completely arbitrary. What difference does it make if Detroit's population was 1,000,000 or 999,999? What's the basis for making a distinction in the laws based on the difference of 1 person? If you're going to get all worked up about the laws because of Detroit's example, you better save some of that outrage for all of the other state laws that are regularly passed to benefit some community of a certain size Here's a good example taken directly from state law of a provision written into law to benefit specific communities without saying so by name.

"Industrial property also includes convention and trade centers in which construction begins not later than December 31, 2010 and is over 250,000 square feet in size or, if located in a county with a population of more than 750,000 and less than 1,100,000, is over 100,000 square feet in size or, if located in a county with a population of more than 26,000 and less than 28,000, is over 30,000 square feet in size."

The difference is that Detroit population is not 1,000,000 or even 999,999 it's 713,000 and falling, so your straw man has no distinction whatsoever because he don't exist. In fact you've produced at least 287,000 straw men to underwrite your approval of getting more tax dollars because you want them not because you qualify for them. What was it Marx was reported to have said? "from each according to his ability to each according to his needs" which when implemented produces a society of declining abilities and soaring needs.

Why does Detroit stand to lose out on income tax revenues?

Michigan law says how big a city has to be to impose an income tax of a particular rate. Post-census the population is too small to impose its current tax rate.

Thank you for clarifying. Facepalm, anyone?

"The difference is that Detroit population is not 1,000,000 or even 999,999 it's 713,000 and falling, so your straw man has no distinction whatsoever because he don't exist."

Quit being so literal. The point is that the numbers have always been arbitrary. The state legislature set a population figures many years so that state's largest city could be treated differently than other urban cities of much smaller cities. Detroit is still the largest city by a factor of over 3 times. Whatever support Detroit gets will still be based on its actual population. It's you who's swinging at straw men in this argument.

Don't have time to look it up, but I just read the new tax data. Michigan still puts more money into the federal government than we get back. I assume the auto bailout pushed us to a bit more than 90¢ on the dollar from around 70¢ IIRC, but that doesn't change the fact that New Mexico gets $2 for every dollar they put in. Even though the auto industries will be paying back those loans, and, in the case of Chrysler, potentially generating a profit for the government once they sell back their [[our?) shares.

We should be getting more money.

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Originally Posted by laphoque

We should be getting more money.

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Yes, that's completely out of whack.