"How Detroit Went Broke"

[Novine]

The Freep dives deep into Detroit's financial problems. Too bad that they once again decided to distort the depth of the debt problem by lumping together the water and sewer debt with the GO and pension certificates. The headline that screams "8 Billion in debt!" never makes clear to the reader that 70% of the debt is accountable to the water and sewer department. Those are debts owed by the users of the system, including suburbanites.

Instead of seizing the opportunity to show how suburban growth contributes to Detroit's overall debt number and how suburbanites are on the hook for a good percentage of that, the Freep leaves the impression that this is a Detroit-only problem. What a huge mistake. I don't know if this is on Stephen Henderson and the editorial side, the news side or both but in that regard, they once again perpetuated a myth about the nature of the debt and they can't use the excuse of not knowing the difference.

[313WX]

Instead of seizing the opportunity to show how suburban growth contributes to Detroit's overall debt number and how suburbanites are on the hook for a good percentage of that, the Freep leaves the impression that this is a Detroit-only problem.

Out of the roughly 4.3 million people who live in SE Michi...I mean the Detroit area, 83% of them live are considered suburbanites and live in the suburbs [[compared to only 40% of them living in the suburbs when Detroit had a population of 1.8 Million). Besides that, I'd bet that most of the folks who work for and run the Detroit Free Press are suburbanites themselves.

So did you expect anything different? Naturally they're going to affirm their own biased viewpoints as well as cater to their predominate audience.

EDIT: Otherwise, It's a decent report. Something I wouldn't have expected from either of the dailies.

[Gistok]

Here's then entire report... there's plenty of blame to go around for the last 50 years...

http://www.freep.com/article/2013091...ension-revenue

[313WX]

What I especially like about this article is that it thoroughly diminishes the claims by suburbanites/whites in Detroit that it was Coleman Young who caused Detroit's downfall. While some of his actions may not have helped Detroit, the fact is the city was actually functional and financially sound under his administration.

The article itself aside, the quality of the replies in the comments section have improved dramatically since they started requiring that people have a facebook account to post.

Several people made interesting points about the Freep's analysis.

William Goodwin · Top Commenter One historical factor in this multifaceted story called Detroit that I believe doesnt get enough credit regarding our raging "Divide" between Suburbanites and Detroiters [[ Code words for Black and White)... Are the hundreds of thousands of Southerners that came up from all over the South in the 20's and 30's to feed the Factories. They brought along with them their "Traditions", namely their animosity toward blacks... In my opinion, that was a major contributor to a lot of the negative DNA that has tainted our region..

Keith Gerard · FollowFollowing · Top Commenter Here is a more practical example of how Coleman Young caused valuable institutions to leave the city. Apparently Coleman Young was rejected for enrollment to Catholic Detroit DeLaSalle High School. Later in life he repeatedly rejected DeLaSalles request to expand their campus across from city airport. In 1983 this nationally ranked HS with a waiting list every year packed up and moved to the burbs. Thus Coleman derived Detroiters of a quality place to send their children AND even forced God's hand on getting the hell out of Detroit.

James Casha · Top Commenter · University of Detroit Phil's [[Cavanagh) dad, and the rest of them, missed the boat. He should have pushed for statewide and/or county ALCOHOL TAXES instead of, or in addition to, instituting an 'income tax'. I don't know if a city can levy an alcohol tax, but if they can, he should have done that as well. Will Phil miss the boat as well?

A recent report from the CDC shows the cost of excessive alcohol consumption in Michigan to be $8.2 BILLION. I would venture to say that a lot of that cost is in Detroit and the social implications contribute to making Detroit - not a very safe, or nice, place to live. http://content.govdelivery.com/accou...lletins/870186

A 20 cent/drink increase in alcohol taxes would generate $500 million in additional state revenue. This is still only 1/5 the 'governments' share of the $8.2 Billion [[$3.2 BILLION). If we raised the tax to $2.00/drink, the state could help all of Michigan's cities.

The 'State' has been listening to the 'alcohol lobby' [[for over 50 years) just like Kwame listened to 'Wall Street'.

Keith Gerard · FollowFollowing · Top Commenter Detroit City Hall kept hiring felons to advise. Detroit Wiki"
Charlie Beckham is the chief administrative officer and a longtime friend of Mayor Dave Bing. He has been an aide to every Detroit mayor since Coleman Young, except for Dennis Archer, and some have called him the "power behind the throne".

A convicted felon, he spent two years in prison in the 1980s after a federal corruption probe.

Quite frankly [[also considering all of the other reasons for Detroit's downfall that have been thoroughly discussed), the city never had a realistic chance. I feel sorry for the folks who will be left behind to clean up the over 60 years of fuckery and wish them the best of luck.

[DetroitPlanner]

Young was proud that he was able to keep the City books balanced. It was something he mentioned often in every speech. Yes he had to do it through lay offs and tax increases, but the City was much better off under him than it was on anyone who followed him.

[Richard]

Young was proud that he was able to keep the City books balanced. It was something he mentioned often in every speech. Yes he had to do it through lay offs and tax increases, but the City was much better off under him than it was on anyone who followed him.

Could it be said that by raising taxes at the time provided short term gains but long term devastation?

Looking at you-tube videos the decline may have started 50 years ago but it seems to have been turbo charged in the last 20 or less.

I would agree that lumping DSWD into the bucket looks good but one still has to wonder if that and the pension aspect,which is being faced and dealt with in every city in the country,were removed from the formula,what shape was the city in?

I am more along the lines of it was bad management in the last ten years that sealed the fate,maybe not singular but a massive push.

[48009]

The Freep dives deep into Detroit's financial problems. Too bad that they once again decided to distort the depth of the debt problem by lumping together the water and sewer debt with the GO and pension certificates. The headline that screams "8 Billion in debt!" never makes clear to the reader that 70% of the debt is accountable to the water and sewer department. Those are debts owed by the users of the system, including suburbanites.

Instead of seizing the opportunity to show how suburban growth contributes to Detroit's overall debt number and how suburbanites are on the hook for a good percentage of that, the Freep leaves the impression that this is a Detroit-only problem. What a huge mistake. I don't know if this is on Stephen Henderson and the editorial side, the news side or both but in that regard, they once again perpetuated a myth about the nature of the debt and they can't use the excuse of not knowing the difference.

The whole suburban growth vs. Detroit is such political correct BS. Why can't we just tell it like it is? The white people left and the city went to hell in a handbasket. Now tell me why a city of approx. 1,000,000 black people can't function? Personal accountability is obviously issue number one. In no particular order: Drugs, violent crime, corrupt race pimps controlling the government, illiteracy, and the complete disintegration of family structure in the black community.

[Novine]

Take off your race glasses so that you can see the point. Of the $8 billion amount splashed on the front of the Freep, around $6 billion of that is owed by Detroit Water and Sewer. Who's on the hook for that amount? Not city taxpayers alone. It's the people who use the water and sewer system, which includes most of the suburbs. The Free Press did a real disservice when they leave the impression with suburban readers that the debt is Detroit's alone or through Detroit's actions alone. Suburban growth fueled the demand for expansion of the water and sewer systems and as the bill comes due for replacing that infrastructure, its the suburbs that are going to pay.

[Cincinnati_Kid]

Young was proud that he was able to keep the City books balanced. It was something he mentioned often in every speech. Yes he had to do it through lay offs and tax increases, but the City was much better off under him than it was on anyone who followed him.

Or before him for that matter. I'm glad that was pointed out also about Young. He takes such a beating and is constantly vilified and blamed for Detroit's current problems, especially on here. He wasn't perfect, but he wasn't the worst mayor either. At least it shows he was the most fiscally responsible of the mayors we've had from the 50's to present. He might have been racially divisive, but he tried to keep the books balanced. That was a good article by the freep. It showed all the obstacles and mistakes each mayor had to deal with.

[maverick1]

The article was excellent although it did miss the issues with the water department. It showed me that I was wrong in regards to some of the fiscal mismanagement I accused Coleman Young of. It's been stated before but there is not one person to blame. Some of the comments on the article and Stephen Henderson's Op-ed are almost or are sociopathic. It's scary that people can read that article and all the facts and data within and comment "It all started with Coleman Young", "It's Young's fault", "Liberals", etc. What kind of reading comprehension is that from adults? The article in no way said that. It gave a thorough explanation of how the city government managed finances over the past 60 years yet some insist on a VERY over-simplistic answer. It has to be what they want to believe. I can't think of any other answer.

[Locke09]

I'm almost proud of the Freep for finally printing something more thorough and balanced than anything the papers have printed in a long time. They didn't just speak to a wide variety of people; they looked at documents and analyzed data.

I do wish they would have acknowledged [[perhaps they do not know) that the General Retirement System used a very conservative 3 year "smoothing" formula until 2009, when they changed it to 5 years. They didn't change it to 7 years until 2011. Both changes were at the request of the administration. These changes reduced the amount of the City's annual contribution. They did this to help the City out, not just to help the funds look better. But it was a move that now makes the trustees look bad. This same change helped justify the 13th check in years that the fund really didn't do well. The administrations of those years share the blame.

[Wesley Mouch]

I'm almost proud of the Freep for finally printing something more thorough and balanced than anything the papers have printed in a long time. They didn't just speak to a wide variety of people; they looked at documents and analyzed data.

I do wish they would have acknowledged [[perhaps they do not know) that the General Retirement System used a very conservative 3 year "smoothing" formula until 2009, when they changed it to 5 years. They didn't change it to 7 years until 2011. Both changes were at the request of the administration. These changes reduced the amount of the City's annual contribution. They did this to help the City out, not just to help the funds look better. But it was a move that now makes the trustees look bad. This same change helped justify the 13th check in years that the fund really didn't do well. The administrations of those years share the blame.

Its not OK to help out the city if it harms those your are entrusted [[trustee) to protect.

Nice to see cooperation -- but less nice when it hides the underlying problems.

They made this 'loan' so they could continue to increase the city's pension liability without addressing any structural reforms.

Not so nice to see gaming of the system. I suppose if the economy had recovered more quickly and Obama were more generous it might have all worked out fine.

Instead, the pension board gambled on the city's future ability to pay and lost.

All that remains to be seen is whether the loss is paid for by pensioners or taxpayers. There are no other options.

[Wesley Mouch]

The article was excellent although it did miss the issues with the water department. It showed me that I was wrong in regards to some of the fiscal mismanagement I accused Coleman Young of. It's been stated before but there is not one person to blame. Some of the comments on the article and Stephen Henderson's Op-ed are almost or are sociopathic. It's scary that people can read that article and all the facts and data within and comment "It all started with Coleman Young", "It's Young's fault", "Liberals", etc. What kind of reading comprehension is that from adults? The article in no way said that. It gave a thorough explanation of how the city government managed finances over the past 60 years yet some insist on a VERY over-simplistic answer. It has to be what they want to believe. I can't think of any other answer.

I liked CAY in many ways, and am glad to dispel the idea that he 'caused' the crisis. It was indeed far more complex than that.

Though I'll defend CAY in many ways, I do think that his leadership was divisive in many ways. More than anyone else, he created the atmosphere of mistrust between the city and suburbs. I know he was the product of his environment -- and the victim of racism of the worst kind by people like the church who should have done us better -- but nonetheless he didn't provide the leadership that might have healed the city. Instead he divided us.

Further, he was instrumental in the binding arbitration rules in Michigan from his time in the state legislature. That more than anything else helped kill Detroit by taking money from the city when it needed it the most to keep services at a higher level. The severe cuts in DPD under his reign hurt the city badly. His hate for the old DPD may have been justified by his life experiences -- but they weren't wise.

[iheartthed]

Or before him for that matter. I'm glad that was pointed out also about Young. He takes such a beating and is constantly vilified and blamed for Detroit's current problems, especially on here. He wasn't perfect, but he wasn't the worst mayor either. At least it shows he was the most fiscally responsible of the mayors we've had from the 50's to present. He might have been racially divisive, but he tried to keep the books balanced. That was a good article by the freep. It showed all the obstacles and mistakes each mayor had to deal with.

Yeah, kinda ironic that he was apparently more fiscally responsible than Detroit's last elected Republican mayor...

[Kevgoblue]

I liked CAY in many ways, and am glad to dispel the idea that he 'caused' the crisis. It was indeed far more complex than that.

Though I'll defend CAY in many ways, I do think that his leadership was divisive in many ways. More than anyone else, he created the atmosphere of mistrust between the city and suburbs. I know he was the product of his environment -- and the victim of racism of the worst kind by people like the church who should have done us better -- but nonetheless he didn't provide the leadership that might have healed the city. Instead he divided us.

Any more than say, Orville Hubbard? I'd say that Young was a black reflection of Hubbard, but that would not be true. Hubbard was MUCH MORE openly, outwardly and publically racist in his rhetoric yet I've never heard anyone either say or imply that he was responsible for the divide between the cities and suburbs.

I think that was just a reflection of the times, as well as the population. Remember the region was full of migrants, many from South, who were raised in the Jim Crow era. Most of which were not highly educated. For many of them Coleman Young was a convenient scapegoat to justify existing opinions. Granted he did little to try to mend any fences or extend any olive branches but I have a hard time blaming him for the animosity that existed between the races.

[bailey]

Yeah, kinda ironic that he was apparently more fiscally responsible than Detroit's last elected Republican mayor...

...and also proved that an austerity regime is not a magic bullet. I mean, glowing praise from Bob Berg aside [[isnt that a little like asking Ari Fleischer his opinions of the Bush administration?) that "fiscal responsibility" came with a giant tax increase and a slashing of services. Which just lead to further exodus and further decline in property values, and further decline in services. It also gave us Poletown type corporate giveaways. THEN when none of that worked, the beginning of massive borrowing.

Does CAY deserve ALL the blame? no. However, he was mayor FOR TWENTY FUCKING YEARS. I don't think it's in anyway unfair to lay quite a bit of it at his feet.

[Locke09]

...and also proved that an austerity regime is not a magic bullet. I mean, glowing praise from Bob Berg aside [[isnt that a little like asking Ari Fleischer his opinions of the Bush administration?) that "fiscal responsibility" came with a giant tax increase and a slashing of services. Which just lead to further exodus and further decline in property values, and further decline in services. It also gave us Poletown type corporate giveaways. THEN when none of that worked, the beginning of massive borrowing.

Does CAY deserve ALL the blame? no. However, he was mayor FOR TWENTY FUCKING YEARS. I don't think it's in anyway unfair to lay quite a bit of it at his feet.

It's unfair to lay it at his feet because he did all the things you are supposed to do when your expenditures exceed your revenue: cut costs [[including services if necessary), increased revenue [[one percent hike in taxes that the voters approved), created a rainy day fund [[which still contained millions when he left office) instead of spending every penny he took in. He left the City with a surplus during a bad economy.

He didn't "slash" needed services. For instance, he cut garbage collection costs and improved those services by implementing the Courville containers. He improved DPD and DFD response times with new technology - leading edge at the time. Under CAY, if response time was more than a certain number of minutes, knees were shaking. He got regular reports.

Many don't know that the CAY administration was the first to suggest decreasing Detroit's footprint. People thought he was crazy. He also wanted to increase revenue by expanding the airport, but folks didn't want their buried relatives moved.

Did I mention he left the City with a surplus? So yes, unfair to lay this at his feet.

And speaking of corporate give-aways, how many people are opposing the give-away to Illitch for his new arena?

[iheartthed]

...and also proved that an austerity regime is not a magic bullet. I mean, glowing praise from Bob Berg aside [[isnt that a little like asking Ari Fleischer his opinions of the Bush administration?) that "fiscal responsibility" came with a giant tax increase and a slashing of services. Which just lead to further exodus and further decline in property values, and further decline in services. It also gave us Poletown type corporate giveaways. THEN when none of that worked, the beginning of massive borrowing.

Does CAY deserve ALL the blame? no. However, he was mayor FOR TWENTY FUCKING YEARS. I don't think it's in anyway unfair to lay quite a bit of it at his feet.

Eh, he balanced the books. That was his job. Did he fail at some other things [[like public safety)? Sure. But lack of fiscal discipline seems to be a misplaced criticism. It's like criticizing Bush for having no minority cabinet appointees...

What struck me last night while I was reading this is that Detroit's revenues have been relatively stable, inflation adjusted, since the city was at peak population. That is something I certainly did not expect to see.

[Hermod]

Yeah, kinda ironic that he was apparently more fiscally responsible than Detroit's last elected Republican mayor...

Miriani went to jail for tax evasion, not for gummint corruption. Cobo was the one who saved the city during the depression then brought it up to the fifties on a sound financial basis.

[Hermod]

What struck me last night while I was reading this is that Detroit's revenues have been relatively stable, inflation adjusted, since the city was at peak population. That is something I certainly did not expect to see.

Yes, but if you spend the city money on friends and family instead of workers and doers, you get the current non-functional gummint.

[Novine]

In 1950s Novi, mobs chased a black family out of town after they bought a house but it's all CAY's fault that there was a black/white divide between the city and the suburbs. Is that what we're supposed to believe?

[jerrytimes]

I don't understand why they were showing the cities debt with inflation back in the 50's. they adjusted the debt in today's dollar, making it look larger than what it was back then. It was like they were trying to do it to make Coleman Young look better.

[Cincinnati_Kid]

I don't understand why they were showing the cities debt with inflation back in the 50's. they adjusted the debt in today's dollar, making it look larger than what it was back then. It was like they were trying to do it to make Coleman Young look better.

That's bogus. Just accept the fact that Young did far more than he was ever given credit for.

[313WX]

I don't understand why they were showing the cities debt with inflation back in the 50's. they adjusted the debt in today's dollar, making it look larger than what it was back then. It was like they were trying to do it to make Coleman Young look better.

Your conspiracy theory falls flat on its face if they also adjusted Young's debt numbers for inflation [[which I don't see why they wouldn't).

[Wesley Mouch]

...and also proved that an austerity regime is not a magic bullet. I mean, glowing praise from Bob Berg aside [[isnt that a little like asking Ari Fleischer his opinions of the Bush administration?) that "fiscal responsibility" came with a giant tax increase and a slashing of services. Which just lead to further exodus and further decline in property values, and further decline in services. It also gave us Poletown type corporate giveaways. THEN when none of that worked, the beginning of massive borrowing.

Does CAY deserve ALL the blame? no. However, he was mayor FOR TWENTY FUCKING YEARS. I don't think it's in anyway unfair to lay quite a bit of it at his feet.

Exactly.

But don't forget that a lot of those tax increases were driven by the policies such a binding arbitration that he help put into place. In the end, he was killed by his own gun -- pardon bad metaphor.