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Originally Posted by
mwilbert
For Novine's purposes, that isn't important unless you think that Denver's legacy costs are higher than Detroit's, as he is merely pointing out that a city the size of Detroit is going to need a pretty good chunk of revenue, even if it were run more efficiently, as is claimed for Denver.
What I would like to see is an estimate of what a credible source [[preferably more than one) thinks is the budget that would be required to provide a minimum acceptable level of services in the city, post-EFM slash-and-burn. From there, we could look at whether revenue available to the city is even sufficient to manage that. If not, the next step would be to see if it were possible post-bankruptcy. If there would still not be enough money, the next step would be to look at actual shrinkage to an urban core--not the still-nebulous Detroit Works, but actual deannexation of large parts of the city. If a city can't provide proper services to its people, it shouldn't exist, but I'm reasonably sure a sufficiently tightly defined area could be viable, once the legacy costs were shed.
Well, it looks like we're getting closer to some answers.
From Stephen Henderson's column in the Freep Press...
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Status quo won't cut it
The governor will need big wins early on the public-service fronts to show that there's a positive purpose to the state's involvement.The city on its own has made a fine mess of basic services. We don't need state government coming in to maintain the status quo -- or even worse, speed the deterioration.Getting things going won't be easy. So much of the city's money is sucked up in debt service and legacy costs [[pensions and retiree health care) that there just isn't much left over to provide services.A conservative estimate shows that nearly 42 cents of every dollar in city revenue is going to those fixed costs. More aggressive analysis places it as high as 56 cents. Without grants and casino tax revenues, the city would barely be able to provide any services at all. We essentially pay taxes in Detroit to cover the city's debt and legacy obligations, with the leftovers going to the services we need.I asked Marcus Hudson, a municipal finance expert, whether I might find other governments operating under such burdens."Yeah," he said. "They're called Greece and Portugal and other European countries that are on the brink of collapse."
I don't know what a reasonable budget is for Detroit, and I think that question is still worth pursuing. What I do know is that no household budget can function with only 60% of its income available for current expenses.