This is sad on so many levels.
Detroit Is Halting Garbage Pickup, Police Patrols In 20% Of City: Expect Bankruptcy In 2011
Detroit has been bankrupt for years. It simply refuses to admit it. Detroit’s schools are bankrupt as well. A mere 25% of students graduate from high school.
In a futile attempt to stave off the inevitable one last time, Mayor Bing’s latest plan is to cutoff city services including road repairs, police patrols, street lights, and garbage collection in 20% of Detroit.
More than 20% of Detroit’s 139 square miles could go without key municipal services under a new plan being developed for the city, with as few as seven neighborhoods seen as meriting the city’s full resources.
Those details, outlined by Detroit planning officials this week, offer the clearest picture yet of how Mayor Dave Bing intends to execute what has become his signature program: reconfiguring Detroit to reflect its declining population and fiscal health. Yet the blueprint still leaves large legal and financial questions unresolved.
Officials bristle when their efforts are described as downsizing, saying their aim is to repurpose portions of the city, not redraw its borders. “We will not be shrinking the city,” Ms. Henderson said. “We are 139 [square] miles and we’ll stay that way.”
Now’s the time to cast off collective bargaining agreements and introduce school choice.
The other insulating force was a conscious decision to wall off Detroit from charter schools. In 1993, Michigan’s legislature made it difficult to create new charters in Detroit by declaring that only community colleges could authorize charters for primary and secondary schools in “First-Class Districts”—defined as those with more than 100,000 students. Detroit was the only First-Class District. In 2003 the state, under pressure from the Detroit Federation of Teachers, turned down a gift of $200 million from philanthropist Robert Thompson that would have established 15 charter schools in the city. Those charters are needed today.
Detroit has hit the end of the line. It’s budget deficit is between $446 million and $466 million (28% to 29%) of $1.6 billion with few ways other than drastic cuts in wages and benefits to address the problem.
The Economic Base
The deterioration of the economic base of the city has accelerated. There were an estimated 81,754 vacant housing units (22.2 percent of the total) in Detroit before the recession; that number increased to an estimated 101,737 (27.8 percent of the total) in 2008.
The average price of a residential unit sold in the January through November, 2009 period was $12,439, down from $97,847 in 2003. Remaining businesses and individuals are challenging property tax assessments on parcels that have lost value and, in some cases, cannot be sold at any price.
More than half of employed city residents work outside the city limits; the metro area has the highest unemployment rate of the 100 major metro areas in the U.S.
“We are still in a financial crisis but insolvency isn’t on the horizon or on the agenda at this time,” Mayor Dave Bing said in an e-mail from his spokesman, Dan Lijana. The total deficit this year is estimated at $280 million.
For reasons unknown, Bing just cannot do what is right. He will not come flat out and say what everyone in their right mind knows – that Detroit is fiscally and morally bankrupt and so are its schools.
Should Mayor Bing not seek bankruptcy assistance, I propose for Governor Snyder to force Detroit into bankruptcy. It is the only hope Detroit has. Mayor Bing is clearly in over his head.
Thus, forced or not, I believe Detroit will file bankruptcy in 2011, the state will accept it, and public unions will be forced to accept massive concessions in bankruptcy court.
Look for massive turmoil in the municipal bond market as a result.