After brewing for decades, Detroit's financial crisis hits the boiling point

[begingri]

By Kathleen Gray andSteve Neavling

Detroit Free Press Staff Writers

Detroit's financial problems didn't just happen overnight.

Or even during the last decade.

The simmering fiscal disaster has its roots in former Mayor Jerome Cavanagh, who started a tradition of borrowing and bonding to pay the city's bills, provide services to residents and make improvements in the city, political experts said Thursday -- a day after a scathing report from state Treasurer Andy Dillon chastised the city for years of budgeting missteps.

In the last 45 years, there have been 19 years of surpluses and 26 years of deficits, said Eric Foster, a Detroit native and political consultant.

"It would have been fitting for Granholm, Engler or Blanchard to start this type of process," Foster said, referring to former Govs. Jennifer Granholm, John Engler and James Blanchard. "With Granholm and Blanchard, naming an emergency manager just wasn't in their political moxie.

"The state has been working with Detroit for years on its annual audit reports and deficit elimination plans, Treasury spokesman Terry Stanton said.

"But the goal is always to have the local unit of government address their own financial difficulties," he said.

Detroit's staggering debt risks default on bonds

Government restructuring experts said Detroit's debt is now so high that the city soon could be forced to default on unpaid bonds, which could lead to bankruptcy.

"This isn't rocket science," said Van Conway, CEO of Conway MacKenzie, a Birmingham-based turnaround firm that has helped reorganize municipalities and school districts. "The city has not been able to stabilize the top line, so it has been issuing bonds.

"When you're in a situation like this, you have to cut and sell assets. It's that simple."

Full article: http://www.freep.com/article/2011122...text|FRONTPAGE

[begingri]

Detroit's debt crisis even worse than thought, state's review reveals

http://www.freep.com/article/20111222/NEWS01/112220519

[Zacha341]

I always knew it was worse than Bing was responding to, worse than Kilpatrick was owning up to...

Detroit's debt crisis even worse than thought, state's review reveals


http://www.freep.com/article/20111222/NEWS01/112220519

[mwilbert]

What Detroit needs most is not cash,, but a flood of educated, hard working foreigners.Detroit needs citizens that care, willing to cut their grass, pick up trash, raise stable families. Detroit also needs business leaders willing to live in the city and not rape it of resources like the current bunch.

There is some truth to this, but it is hard to attract educated, hard-working people to a city without cash, when they could live someplace else. It hard to attract people to a region with limited employment options in any case. There is a chicken-and-egg aspect to this problem, and the part that is more manipulable [[not saying easier) is the part where the city's financial situation gets resolved, no doubt via draconian measures.

[Zacha341]

And it's hard to draw educated, hard working people to a high crime environment, where personal property theft is prominent as well...

There is some truth to this, but it is hard to attract educated, hard-working people to a city without cash, when they could live someplace else. It hard to attract people to a region with limited employment options in any case. There is a chicken-and-egg aspect to this problem, and the part that is more manipulable [[not saying easier) is the part where the city's financial situation gets resolved, no doubt via draconian measures.

[Hermod]

Detroit public schools were never segregated

while Detroit schools never had de jure segregation, they did have de facto segregation caused by residential segregation and some tinkering with school boundaries. In the 1950s, Denby High School was 100% white and Miller High School was 100% black. That sure seems like segregation to me.

[mwilbert]

And it's hard to draw educated, hard working people to a high crime environment, where personal property theft is prominent as well...

Also a big problem. Both the fiscal and the policing problems could probably be improved with better management, but neither of them are going to be fixed easily or quickly, and both of them could use some outside assistance. Attracting new residents is even less likely to be affected by changes in city policy.

[j to the jeremy]

I'm leaving, on a jet plane, hope Bham's gone when I'm back again.....la de de do

[JBMcB]

Detroit also needs business leaders willing to live in the city and not rape it of resources like the current bunch.

Detroit also needs people who don't consider businesspeople who move their operations to Detroit, creating jobs, economic activity and tax revenue, "raping" the city.

Seriously, dude, Quicken and Compuware could have easily stayed out in Southfield, or moved to Farmington or Novi or Livonia, there's plenty of room. Those guys moved downtown to help out the city. Yelling at them for not moving to the city is counterproductive.

[mwilbert]

Detroit also needs business leaders willing to live in the city and not rape it of resources like the current bunch.

This doesn't really make sense to me either. The "willing to live in the city" would be nice but is hardly essential. I have absolutely no idea what the "rape it of resources" part means; what resources are being pillaged? Most of the stuff that looks like raping the city to me has been done either by impoverished criminals or by political bandits. I prefer the out-of-town businessmen.

[mwilbert]

In my opinion, Moroun is not a force for good, but I don't see how he is raping the city of resources. If he is raping anyone, it is the trucking companies, probably rarely from Detroit. His misappropriation of previously public streets has been screwing up the traffic flow around Mexicantown. That's about it. Some people would like to blame him for the decay of the MCS, but few people think that there has ever been any realistic possibility of it being redeveloped, nor am I aware of any exciting riverfront development he is preventing. And to the broader point, he doesn't seem representative of Detroit businessmen as a class.

Detroit's decline has been going on for 60 years [[or 80, depending upon how you look at it). The current crop of businessmen just aren't that important, one way or another.