40% of the street lights in Detroit are turned off to save money.
It takes police about an hour to respond to an emergency call. The city’s population has dropped by more than 25% since 2000.
Detroit is in trouble.
So much trouble that the city filed for bankruptcy protection. Currently facing total liabilities of about $18 billion, there just isn’t a light at the end of the tunnel without bankruptcy protection.
Unions are worried about pensions being slashed; involuntary cuts to pensions has rarely occurred in municipal bankruptcies because many of the pensioners still live in the municipality or are still working at the jobs that promised them a pension.
It is a difficult situation.
The city is shrinking, crime is high, and unemployment still sits over 16%. From a financial perspective there doesn’t seem to be much else to do besides file for bankruptcy. Despite this the plans to build the Detroit Red Wings a new arena — at a cost of $444 million — is still going through. The emergency financial manager of Detroit and the state of Michigan agree that it will create jobs, but is it the best way to spend a half-billion dollars? Only time will tell.
Avoid the dire circumstances Detroit is facing in your own finances. These great reads will help you keep your finances running smoothly:
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