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Townhall
Finance
America's
Fiscal Stupidity Mirrors
Detroit
by John Ransom
It’s
fitting that on the day
Washington, DC is cutting the budget by an agreement that they really
didn’t
mean, that the city of Detroit will finally get what it has needed for
a long
time: declaration of fiscal disaster.
Michigan’s
Rick Snyder has
appointed an emergency city manager to do for Detroit what Obama,
Biden, the
UAW, GM, Chrysler, the city’s council and mayor have not been able to
even do with
a $80 billion bailout of the automotive industry.
“Snyder’s
decision comes after a
state review team report concluded last week that Detroit is in a
financial
emergency that it cannot fix on its own,” reports the Detroit Free
Press. “The
report detailed $14 billion in long-term bond debt and retiree pension
and
health benefits the city owes in addition to a $327-million accumulated
deficit
Detroit has been unable to tame. That figure could inflate by $100
million by
July.”
The
city has been powerless to stop
plunging tax revenues. According to the Detroit News almost half of the
city’s
homeowners have not been able to pay property taxes:
“The
News reviewed more than
200,000 pages of tax documents and found that 47 percent of the city's
taxable
parcels are delinquent on their 2011 bills. Some $246.5 million in
taxes and
fees went uncollected, about half of which was due Detroit and the rest
to
other entities, including Wayne County, Detroit Public Schools and the
library.”
The
article notes that delinquency
is so bad that in one stretch of 77 blocks only one owner had paid
their taxes.
And
it’s not just that residents
can’t pay. It’s that many of the taxpayers say they won’t pay taxes for
services they aren’t getting.
More
from the Detroit News:
"Why
pay taxes?" asked
Fred Phillips, who owes more than $2,600 on his home on an east-side
block
where five owners paid 2011 taxes. "Why should I send them taxes when
they
aren't supplying services? It is sickening. … Every time I see the tax
bill
come, I think about the times we called and nobody came."
Like
America’s long decline into
fiscal stupidity, Detroit’s problems didn’t have their start in the
fiscal
crisis of 2008...
Read
the rest of the article at
Townhall Finance
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