So much for that comeback. The city is very nearly bankrupt. 40 years of mismanagement and corruption will do that to a city.
The Detroit city government is weeks away from running out of the cash it needs to operate, according to an initial report from the emergency manager overseeing its finances.
The report from Kevyn Orr, the bankruptcy attorney appointed by the state in March, lays out a bleak financial position for the city.
“The city has effectively exhausted its ability to borrow,” he writes in the report, adding that the city “is clearly insolvent.” To avoid running out of cash before the end of its fiscal year on June 30, it must “defer payments on its current obligations,” including more than $100 million in pension payments that are due.
“No one should underestimate the severity of the financial crisis,” Orr said in a statement. “The path Detroit has followed for more than 40 years is unsustainable and only a complete restructuring of the city’s finances and operations will allow Detroit to regain its footing.”
He said this report was a baseline from which to develop that restructuring plan. It does not use the term “bankruptcy,” but Orr hasn’t ruled that out.
Detroit is struggling under at least $15 billion in debt, due to years of borrowing to pay its bills as tax revenues plummeted. The population of the city has fallen by nearly 30% since 2012, and there are currently over 100,000 vacant lots and buildings. Together, this has meant a drastic drop in revenue from both income and property taxes.
The city of Detroit ladies and gentlemen, is the poster child of what the results are when Democrats and liberals control the government. And they have, for the last 40 years.