Detroit debt crisis may grow

BY STEVE NEAVLING
DETROIT FREE PRESS STAFF WRITER

Already shouldering a $155-million deficit, the City of Detroit could spiral further into debt if Mayor Dave Bing isn't successful in challenging U.S. census results that show the city lost a staggering 25% of its population.

The population drop, from 951,000 in 2000 to 713,000 in 2010, means the city stands to lose hundreds of millions of dollars a year at a time when state revenue sharing and property and income taxes continue to nosedive, pension and health care costs are on the rise and the economy is sputtering.

The federal government, for example, gives cities about $1,200 for each resident to finance roads, hospitals, police and health care for lower-income residents, among other services.


Continued at: http://www.freep.com/article/2011032...risis-may-grow

As bad as its implications might be for Detroit and other Metro Detroit municipalities, I'm beginning to think bankruptcy might be the best option.

Something's gotta give.

You guys really need to stop with the bankruptcy nonsense. No future EFM of Detroit is going to file bankruptcy especially now that they have dictatorial powers to do what they want.

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Originally Posted by begingri

[B][EMAIL="sneavling@freepress.com"]The federal government, for example, gives cities about $1,200 for each resident to finance roads, hospitals, police and health care for lower-income residents, among other services.

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Where has THAT money been going all these years? The roads in Detroit are in terrible shape.

Iirc, there is a state law which allows for cities above 750k to have an income tax of 3%. Cities below 750k can only charge 1.5%.

Expect further belt tightening.

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You guys really need to stop with the bankruptcy nonsense. No future EFM of Detroit is going to file bankruptcy especially now that they have dictatorial powers to do what they want.

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Exactly.

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irc, there is a state law which allows for cities above 750k to have an income tax of 3%. Cities below 750k can only charge 1.5%.

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Now there is a situation with the potential for some serious mischief in the legislature. Not to say that potential will be realized.

I think that an EFM for Detroit is pretty much a foregone conclusion at this point. I'm not sure what the point of waiting is--maybe politically it is better to wait until people aren't being paid.

Detroit's sub-750,000 Census count may lead to serious fiscal consequence

http://www.mlive.com/news/detroit/in...ensus_cou.html

They are totally screwed.
Remember when people used to invest in municipal bonds that cities offered in order to fund themselves?
Sad to say that these have become very risky investments, and further compounding this debacle is that their yields are FAR below inflationary realities. It's a losing proposition for investors. Ask Ben Bernanke for further guidance...

There should be celebrating and champagne bottles being popped right now. Don't you guys profess that Detroit's taxes are WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAY too high. Well, now they have to come down to Earth from way out at Pluto.

Why no celebrations planned?

Why is there a program in which locales receive federal funds, except in emergencies? Being a native born Detroiter that lived in the city for decades, I never got why Washington was doling out funds to cities. Cities, counties, and states should swim in their own financing.

Most federal funding isn't in the form of direct assistance. It's funding communities get that are tied to federal programs. As the number of people declines, the share of funding goes down.

Whatever ends up happening, Detroit needs to completely overhaul its planning policy and zoning code. They need to discourage the hell out of the construction of single-family homes, for one. It's a huge reason why Detroit feels so much emptier than comparable cities with a lot of vacant land. It's much more difficult to tear down attached housing when it becomes abandoned and in turn that encourages refurbishment and density over the houses-in-the-prairie feel of Detroit-style abandonment.

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Whatever ends up happening, Detroit needs to completely overhaul its planning policy and zoning code. They need to discourage the hell out of the construction of single-family homes, for one.

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I agree with this.

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It's a huge reason why Detroit feels so much emptier than comparable cities with a lot of vacant land. It's much more difficult to tear down attached housing when it becomes abandoned and in turn that encourages refurbishment and density over the houses-in-the-prairie feel of Detroit-style abandonment.

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I disagree with this. The reason Detroit feels emptier is that it is emptier. The idea that it is harder to tear down a blighted apartment building than a house isn't really a benefit. The problem isn't the type of building [[except insofar as cities should probably have more apartments than Detroit does) but the lack of people. I favor apartments because there are already plenty of houses, and because the kind of people who are most likely to want to live in Detroit are also more likely to want apartments.

If you really like apartments, drive up Grand River and head east on either Philadelphia or Chicago. There are at least 3000 units, in the remains of beautiful buildings. Keep heading east on Chicago. You will cry.

Exactly. I wouldn't recommend putting apartments in places where no one wants to live anymore.
Anything that is built in the city should be concentrated in those few areas which are both strategic and relatviely desirable, unless there is some compelling reason why it needs to be somewhere else. Building more housing in the city is stupid, except insofar as it is located someplace where there is a shortage. There are really not many places like that,.