Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am just still pointing out that Detroit still has a bloated public sector
Cutting those pensions would violate the Constitution of Michigan.
Detroit has to maintain a reasonable level of municipal services as it is the primary business center of the region. It could I suppose shut down...thereby cutting off most commerce and killing its primary remaining income source...but is that not dull?
Practically it need a bailout and likely a sustained one. BK will not fix its problems.
Cutting those pensions would violate the Constitution of Michigan.
Detroit has to maintain a reasonable level of municipal services as it is the primary business center of the region. It could I suppose shut down...thereby cutting off most commerce and killing its primary remaining income source...but is that not dull?
Practically it need a bailout and likely a sustained one. BK will not fix its problems.
Sure, they need a bailout, but that doesn't mean they will get it. Michigan residents certainly don't want to support Detroit after their recent behavior, and Obama will have a hard time getting anything through the congress.
If they are getting no money, they have to cut. Question is, what will they cut.
Sure, they need a bailout, but that doesn't mean they will get it. Michigan residents certainly don't want to support Detroit after their recent behavior, and Obama will have a hard time getting anything through the congress.
If they are getting no money, they have to cut. Question is, what will they cut.
It will be interesting to watch. The BK was obviously designed to shed most of Detroit's debt to try and get it functional. I am skeptical that could work...and it cannot if the Constitutional provision is enforced.
If Detroit ceases to function than the outer suburbs crash as the jobs go away and Detroit itself goes from catastrophe to far worse. Detroit makes most of its income from income tax and then from property tax. Both head toward zero as Detroit crashes.
The thing I don't understand is if the courts decide that the pensions have to paid back in full, where is this money exactly coming from? Detroit certainly doesn't have it, and I'm guessing they wouldn't be able to get it, even with selling off assets and privatizing some services. Would Michigan then be responsible for paying the remainder? Do the pensioners garnish the city's entire tax revenue until it's paid up?
That is what Michigan is afraid of. If the pension are upheld...which could happen even in federal bankruptcy court than there is no money to run Detroit. The metro cannot stand to haqve Detroit collapse. So Michigan ends up compelled to bail out Detroit.
Lots of ugly possibilities. Michigan refuses. Detroit collapses. National Guard in to run the town?
So it appears Michigan hopes to sock it to certain classes of creditors including the pensioners to avoid having to deal with it. And figures like 10 cents on the dollar have been mentioned.
I'd take these results with a grain of salt. The article itself claims the numbers have issues:
Quote:
The Census Bureau excluded from these figures all teachers and education professionals, which make up the largest group of local government employees. The figures also do not include separate government divisions that comprise significant portions of many urban public workforces, like the 1,200-employee Baltimore City Housing Authority, the 1,000-employee Philadelphia Housing Authority and the 2,300 employee Chicago Park District.Transit systems, such as the 9,500-worker Chicago Transit Authority and New York's 7,000-person Port Authority, are also not counted.
In different places, levels of government have different cost-sharing arrangements, with the state, county and special taxation districts for services like sewage picking up part of the tab, so these figures represent somewhat less than all of the government employees for which residents of a jurisdiction support with tax dollars.
That also means that a simple comparison of city workforces -- especially between cities in different states -- doesn't always show the full picture.
The thing I don't understand is if the courts decide that the pensions have to paid back in full, where is this money exactly coming from? Detroit certainly doesn't have it, and I'm guessing they wouldn't be able to get it, even with selling off assets and privatizing some services. Would Michigan then be responsible for paying the remainder? Do the pensioners garnish the city's entire tax revenue until it's paid up?
I've thought about this as well.
We've never seen this happen to a city the size of Detroit.
A few legal firms are probably going to try to connect some dots to pin responsibility on the state and Feds. I just want to see what "dots" are used and how "creative" things get. It's pretty interesting...from a legal POV.
One poster mentioned as low as 10 cents on the dollar. Whoa! That is rough.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
