Detroit’s death spiral
Bing to cut services, chasing away residents, lowering tax revenues, requiring more service cuts...
Published: November 23, 2011
Despite that, though, what isn't an option for Detroit at this point is the filing for federal Chapter 9 bankruptcy. Just last week, in the largest municipal bankruptcy in U.S. history, Jefferson County, Ala., took that extraordinary measure in an attempt to deal with the burden of more than $4 billion in debt.
Pennsylvania's capital city, Harrisburg, also filed for bankruptcy recently.
However, according to Buss, the only way for a Michigan municipality to file for bankruptcy is for an appointed emergency manager to initiate the proceedings, which would then have to be approved by the state before moving forward.
In other words, that ain't going to happen — at least not in the foreseeable future.
Also gaining headlines last week was the claim by Bing — finally taking up an issue long raised by Detroit Councilwoman JoAnn Watson — that the state owes Detroit $220 million in revenue-sharing that was promised by then-Gov. John Engler back in 1998 in return for the city reducing its income tax rates. (For more details on this issue, see this week's "Stir it up" column by MT's Larry Gabriel.)
No one is denying that the promise was made. But that pledge doesn't have the force of law, and so any obligation the state has at this point is a strictly moral one. There's apparently no turning to the courts for help. And, given the state's problems balancing its own budget, the political likelihood that a Republican-dominated Legislature would meet that obligation now, according to Buss, is "slim to none. And probably closer to none."
So, what's the answer?
Buss lets loose a deep sigh when we ask her that question.
"I wish I knew," she says. "I think we are all struggling to figure out a permanent solution."
In other words, no matter who it is that ends up calling the shots for the city of Detroit, things are going to get much worse before they get better, and even the most optimistic view is that the prospects of reversing a downward spiral 50 years in the making remain a distant hope.
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