Detroit’s Clock Striking Midnight

Stephen Henderson, Detroit Free Press, November 16, 2011

The City of Detroit is running out of money.

Not in the theoretical terms we’ve imagined for decades, but in literal figures, splayed out over spreadsheets that tell a long story of mismanagement and incompetence, culminating in insolvency.

Cash runs out by April, unless dramatic steps are taken. Tonight, Mayor Dave Bing will address the city to lay out his plan to avoid a financial implosion.

But he’s late–a leader who inherited a financial mess in 2009 but didn’t act swiftly or decisively enough to stop a slide that had been building for decades.

The short-term options now are all either horribly unappealing or beyond the mayor’s grasp. And financial analyses say even the most draconian (massive layoffs or repudiation of the city’s retiree benefit obligations) buy the city only a short reprieve; the imbalance would return by next summer.

So the priority has to be fixing the city’s short- and long-term problems simultaneously, to restore solvency once and for all. That means finally addressing a number of things:

{snip}

• Jettisoning noncritical services. Detroit still operates a money-losing airport, a crumbling public lighting infrastructure, and a health department that duplicates county services. Bing has promised to prioritize services, but so far has failed to deliver.

• Reversing the city’s revenue trends. Detroit real estate has lost 87% of its value since 2003, according to a study. Property taxes provide just 14% of the city’s general fund; most cities average around 60%. Income tax receipts have dropped nearly 50% in the past decade.

Some of these steps can be accomplished by the mayor. Others may require an emergency manager or, even worse, a bankruptcy declaration.

{snip}

The city’s profound revenue problems rarely come up in discussions about its budget, but they must be confronted in any plan to stabilize its finances. The numbers are just mind-blowing.

Income tax receipts in the city have dropped from nearly $400 million in 2000 to just over $200 million last year.

Property taxes are even more out of whack. They’ve dropped by 20% in just the last five years and now account for just 14% of all general fund revenues.

{snip}

In the end, the city has the highest tax rates in the state, both property and income, but is not generating nearly enough money, because so few people remain to pay those taxes.

{snip}

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  • Mike B.

    The city may soon go bankrupt.

    Hmm… I’m struggling to see the problem here.

    (Maybe it’s just me.)

  • Anonymous

    Funny, I thought that it was bankrupt.

  • Question Diversity

    This headline is ironic in a cruel sort of way. If “Detroit’s Clock Strikes Midnight,” then it turns back into a Pumpkin. And that would be an improvement over what’s there now.

    If the clock is before midnight, does this mean Detroit as currently constituted is Cinderella?

  • Howard W. Campbell

    I’ve heard it said by emergency room doctors that eventually all bleeding stops. Detroit will be another Prichard, Alabama and pension payments will go out the window. How soon though before the people in the surrounding counties will be hit up to cover for Detroit? Let it go bust and start fresh.

  • patthemick

    Detroit is proof that people will vote with their feet. If you overtax the populace they will move. The black leaders saw the rise to power as an opportunity to exploit the money and used it to corrupt their own city because when the population sees their leaders taking advantage are going to also take advantage to the best of their limited means to do so.

    We certainly cannot leave the auto industry out of the problem as they sought cheaper labor costs and the unions sought ever increasing benefits with no regard to their hosts behaving like parasites eating a carcass. What we need in this country is a sense of patriotism towards our own country.

  • Tom S.

    * -splayed out over spreadsheets that tell a long story of mismanagement and incompetence, culminating in insolvency.

    Yes and this “long story” began the day Coleman Young became mayor!

    *So the priority has to be fixing the city’s short- and long-term problems simultaneously, to restore solvency once and for all.

    The short and long term problem is that blacks run the city! You can have solvency or you can continue to let blacks run the city, its impossible to have both at the same time!

    *-because so few people remain to pay those taxes.

    Should read – because so few WHITE people remain to pay those taxes.

  • Rhialto

    At AmRen recently, there have been articles about three diverse places, Jefferson County, South Africa, and Detroit, being in severe decline from their previous condition of stability and affluence. Is there any common factor? None comes to my mind, except that all are now black governed where they were previously white governed.

  • white is right, black is whack

    1 — Mike B. wrote at 6:05 PM on November 16:

    “The city may soon go bankrupt.”

    Hmm… I’m struggling to see the problem here.

    (Maybe it’s just me.)

    The problem is they will come to white areas and bring their usual pathologies with them, the whites and other will leave, they’ll say “oh we left because of the crime” and never notice or admit either to themselves and certainly not to others that it’s because of the high black (and hispanic) population. They won’t draw a correlation between black areas and high crime. They’ll say, “Oh, we’re all the same” or “There’s good and bad in every race.”

  • Jim

    I wouldn’t care, but you can bet blacks will be moving out of Detroit looking for a tax base to enable their massive sense of entitlement. White liberals will be more than happy to help “enrich” white suburbs, too. Oh, I almost forgot: Detroit’s financial problems are obviously a result of racism and white priviledge … somehow.

  • Anonymous

    The model is becoming clearer; once the tax-takers out number the tax-payers the city begins an inevitable downward spiral. The majority of tax-takes vote for more social programs than the wealth producers care to pay. Those wealth producers leave, reducing tax revenues. For awhile the city borrows to pay the bills, but alas the basic tax producing businesses don’t care to participate and vote with their feet. Meanwhile a growing community of tax-takers have installed their candidates, many who see the benefit of buying votes with the tax payers money. Then the borrowing reaches a limit, the wealth producers are gone, and so are the prospects for a viable city. Detroit, Camden, Newark, and Baltimore come to mind.

  • Anonymous

    Don’t worry, Detroit will be reinvigorated and revitalized by the incoming flood of Muslims and Mexicans.

  • Deirdre

    The city of Detroit would be best served by a wrecking ball. It’s so sad to see the current state of what was once one of America’s greatest cities. And all due to black people’s habits of laying waste any place they call home.

  • Phil

    Here is a graphical illustration of reality:

    Detroit then and now: http://goo.gl/iYpQg

    http://goo.gl/E7nKU

    Dresden then and now:

    http://goo.gl/CZczL

    http://goo.gl/N3yXL

    I don’t know why I am a race realist, really…

  • Jack Krak

    One statistic in particular jumps out at me – Detoilet real estate has lost 87% of its value in the last eight years?!?!?!?! Seriously??? I know property values have sunk a bit or been treading water nationally for a while but losing nine tenths of the property value of a formerly great city in that time frame is something ONLY the good people of Detoilet are capable of. I forgot how many empty houses they have there & the stories of the forrest reclaiming abandoned homes are real. Does this mean there is no real estate industry there? How do you survive as a real estate agent or agency owner when there are no buyers for homes that are already comically cheap? Hell, if a house is only worth 13% of what it was worth eight years ago, why not just give the damned thing away? Let me answer my own question – because no one wants to live there, free house or not….

  • Uncle Bob

    It’s already bankrupt in various ways.

  • kgb

    I was actually surprised to learn what a jewel of a city Detroit USED TO BE back in the 1950s. I found pics online showing once-grand architecture falling into decay. This was saddening, because all my life Detroit has been the Murder Capital of America, home of Devil’s Night fires and crime….

  • kgb

    BTW, the looting of Detroit by its African leaders was NOT “incompetence”, because they KNEW WHAT THEY WERE DOING. They looted the treasury with the intent of soaking up as many white tax dollars as they could (no doubt shoutting their mantra to the heavens: “Rich at last! Rich at last! Thank God I’m free at last!”).

  • Alexandra

    This is depressing.

    My dad grew up in Detroit in the 1940s. He used to tell me about movies in the park and on Belle Isle, how you could get a big scoop of candy for a penny, how you could go to sleep in the park and actually wake up in the morning. You could leave your door unlocked, go on vacation for a week, and find your stuff still there. He also said that Highland Park was once a high-class neighborhood.

    By the time I was born in the 70s, it was on the way down. If my class was to go to Detroit for a field trip, he gave or denied permission based on where in Detroit it was. He told me that the east side was the worst. He also advised me that if I was driving through a Detroit slum, do not stop at stop signs if there are kids out playing–they’ll carjack you or break your windows or whatever.

    It’s no wonder that the city of East Detroit changed its name to Eastpointe about 20 years ago.

  • Mike B.

    @ 8 — white is right, black is whack wrote at 10:07 PM on November 16

    I was being HIGHLY sarcastic! Trust me…

  • Ian J. MacAllister

    I smell a federal bailout coming. And if you oppose it, you’ll be smeared as a “racist.”

  • Tom in Illinois

    How can they be BANKRUPT!? I mean, how many minorities are fed on welfare, foo’ stamps, medical card, sometimes some free rent, free lunches at school? Imagine the money they have in their pockets for all that!

    Detroit has plenty of money…the truth is, it’s very poorly spent!

  • Anonymous

    kgb-

    You don’t even have to look at the pictures from the 1950’s. I’m not

    that old, and I can remember back in the early to mid 1970’s when the Lion’s stadium in Pontiac made it’s debut,either on Monday Night Football, or another televised weekend game. For that day and age, it was a heck of a structure,and state of the art for the time.

    A year or so back, that stadium was auctioned off,and it commanded a price that would have bought a fairly big house in a nice suburb of DFW or Austin. Not a mansion, mind you, just a really nice house.

    Amazing,when you think about it. There are office buildings that are approaching a hundred year lifespan,and are still both usable and used. But a football stadium can be rendered useless and almost totally worthless in less than 50 years.

    By forces of nature,obviously, since the people in charge of the area are just like us, and there’s good ones and bad ones just like we have, and we all bleed red, etc.

  • Philly Gal

    Here in Killadelphia, talk of a federal bailout arises again and again. Of course, the city of my birth is Detroit’s equally ugly twin sister. North Philly, West and Southwest Philly – you name it, it’s a catastrophe. Last summer, I went to visit the street I was born on, and it was GONE! Not my house, the WHOLE STREET! It was nothing but huge piles of bricks and shattered glass. It LOOKED like Dresden after the war! I’m caring for an elderly, failing father who won’t move, but as soon as this situation ends, I’m looking at Montana or Idaho or Wyoming or North Dakota. Is anyone acquainted with these states well enough to make a recommendation (or a warning?) Are there cities in these states that I should AVOID?

  • Anonymous

    As strange as it may sound today, Detroit was once one of America’s finest cities. Of course, what ruined Detroit was the arrival of too many blacks, especially unproductive ones. One thing many Americans may not consider. Detroit is also a border city. It is the first place many Canadians see when they cross the river to travel in America. It is a really bad first impression of America.

  • Question Diversity

    I just don’t understand how Detroit can be in such bad straits. After all, it does have an educated citizenry: According to the Census Bureau, 98% of Detroit residents hold a kindergarten degree.

  • Mike B.

    25 — Question Diversity wrote at 8:01 PM on November 17:

    I just don’t understand how Detroit can be in such bad straits. After all, it does have an educated citizenry: According to the Census Bureau, 98% of Detroit residents hold a kindergarten degree.

    Are you SURE it’s THAT high?! I’d really like some ‘peer reviewed’ proof please.

    /sarcasm

  • Anonymous

    Once a decent city; now a ruined wasteland. High crime, high illiteracy, degenerate ‘landscapes’….what a waste of a once prosperous city. But what do you expect?

  • Up to my neck in CA.

    The city could generate revenue by renting itself out to Hollyweird as a set for their next Apocalypse movie or Mad Max IV. If Detroit is not the shining example of B.R.A, then I don’t know what is. Soon to follow: Chicago, Oakland……

  • Anonymous

    “The city could generate revenue by renting itself out to Hollyweird as a set for their next Apocalypse movie or Mad Max IV. ”

    Film crews are pretty vulnerable. Everything is out in the open and spread out. They would have to spend a fortune on security, and another fortune defending the lawsuits brought by blacks after security prevented them from raping and pillaging the crew.

    I think maybe once. Or 1/2. They probably would relocate after a few rampages and invasions.