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A number of factors -- most notably steep population and tax base falls -- have been blamed on Detroit's tumble toward insolvency. Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.
In recent months, the city has relied on state-backed bond money to meet payroll for its approximately 10,000 employees.
Orr was unable to convince a host of creditors, the city's union and pension boards to take pennies on the dollar to help facilitate the city's massive financial restructuring.
...
Detroit's budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.
The people taking union and pension money wasn't giving up a penny to help out.
They blame steep population falls. That's NOT the cause. Why did they leave? THAT would be the cause.
The population didn't spend the money. For crying out loud - quit blaming everybody else and look at yourselves.
How does Detroit rebound? What were the causes of its problems?
Automakers wanted cheap labor, they couldn't find it in Motor City, so they closed up shops and moved where labor was cheaper. This put the proverbial torpedo into revenues collected by the city and state governments. When a city loses workers, it's same as losing taxes paid by those workers.
Liberals tried to save jobs through negotiating, but found stiff opposition to their ideas of concessions. Detroit won't ever rebound, IMO.
City of Detroit Pension
Funds File Lawsuit to Block Bankruptcy Filing
DETROIT, July 17, 2013 /PRNewswire/ -- The General Retirement System of the City of Detroit and the Police and Fire Retirement Systemof the City of Detroit (the "Retirement Systems") announced today that they have initiated acivil action against City of Detroit Emergency Manager Kevyn Orr and Governor Rick Snyder in the Ingham County Circuit Court, Lansing, Michigan.
In the suit, the Retirement Systems challenge the authority of the Emergency Manager and the Governor to authorize bankruptcy proceedings for the City of Detroit that would in any way impair the accrued financial benefits of theRetirement Systems' plan participants and beneficiaries, said benefits being protected by Article IX, Section 24 of theMichigan Constitution of 1963. By allowing any such impairment, the lawsuit asserts that the Emergency Manager and the Governor would be in violation of their respective oaths of office, which, pursuant to Article XI, Section 1of Michigan's Constitution, require them to support and uphold the Michigan Constitution.
Seems to be the common factor in most city financial crises nowadays.
It's more than cities, many states, counties and small local governments are in the same boat. The early part of the last decade many of gave out contracts that should never have been given and now the bill is due.
Anybody know how much the city had promised its workers in future pension plans, that it was then unable to pay when they started actually retiring?
Seems to be the common factor in most city financial crises nowadays.
How many such pensions were "negotiated" by unions?
How many contracts are signed by only ONE side?
Government-union contracts are between three sides:
1.) The union
2.) The government who collects taxes to pay them
3.) The citizens who pay taxes for city services
One of those sides was NEVER present during contract negotiations and signings. (Hint: It wasn't the union or the govt).
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