Detroit becomes largest U.S. city to enter bankruptcy

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DETROIT — The city of Detroit officially became the largest municipality in U.S. history Tuesday to enter Chapter 9 bankruptcy after a judge declared it met the specific legal criteria required to receive protection from its creditors.


The landmark ruling ends more than four months of uncertainty over the fate of the case and sets the stage for a fierce clash over how to slash an estimated $18 billion in debt and long-term liabilities that have hampered Detroit from attacking pervasive blight and violent crime.
http://www.freep.com/interactive/ar...-Bankruptcy-history-1950-debt-pension-revenue

"It is indeed a momentous day," U.S. Bankruptcy Judge Steven Rhodes said at the end of a 90-minute summary of his ruling. "We have here a judicial finding that this once-proud city cannot pay its debts. At the same time, it has an opportunity for a fresh start. I hope that everybody associated with the city will recognize that opportunity."

In a surprise decision Tuesday morning — Rhodes also said he'll allow pension cuts in Detroit's bankruptcy. He emphasized that he won't necessarily agree to pension cuts in the city's final reorganization plan unless the entire plan is fair and equitable.


"Resolving this issue now will likely expedite the resolution of this bankruptcy case," he said.


Rhodes' verbal ruling, which will be followed by a 140-page written opinion, gave Detroit the green light to enter Chapter 9 bankruptcy. "The court finds that Detroit was and is insolvent," he said. "The court finds that the city was generally not paying its debts as they became due." Rhodes said he will not issue a stay on the bankruptcy, meaning the case will proceed.


http://www.usatoday.com/story/news/nation/2013/12/03/detroit-bankruptcy-eligibility/3849833/

Detroit, just another example of what happens when democrats are in charge.


liberal-success-death-city-liberals-bankrupt-detroit-politics-1380647787.jpg
 
why has the state STOPPED returning tax dollars to this city?

the people pay taxes and the state refused to give that city its share of the tax dollars back.

How would your city do if the state cut you off even though they take in revenue from your city?
 
http://www.huffingtonpost.com/2012/01/26/detroit-income-tax-cut_n_1224341.html


Detroit, already hurting for revenue, must cut personal income taxes by July 1 to comply with Michigan law, according to a report released Friday by the Citizens Research Council of Michigan, a non-partisan think tank.

Under an agreement more than a decade old with the state of Michigan, Public Act 500 of 1998, Detroit must reduce income taxes each year for both residents and non-residents unless the city meets criteria for financial distress, which it has done every year since 2003.

The city stands to lose an estimated $8.5 million from the cuts, which would reduce the resident income tax rate from 2.5 percent to 2.4 percent and non-resident from 1.25 percent to 1.2 percent.

Tenths of a percentage point may seem minor in a $1.2 billion budget, but the loss of millions in tax revenue would be nearly impossible to make up and may further damage Detroit's efforts to avoid a takeover by a state-appointed emergency manager.
 
Any proof to that claim?

Detroit's problems arose out of them spending more money than they were taking in. Under Mayor Kwame Kilpatrick, who has since been convicted and sent to jail, he started borrowing from banks to cover the shortfalls by issuing bonds for pension obligations.
 
The law has been on the books since 1998.

City of Detroit’s municipal income tax rates (resident and nonresident) will be rolled back in July for the first time since 2003. These reductions will occur because the City failed to meet three of the four criteria in state law that would prevent the rollback from occurring. The rate reductions are estimated to cost the City $8.5 million on a full-year basis. The estimated revenue loss, while minor in the big picture of Detroit’s finances, comes at a time of considerable fiscal stress for the City.

State law (City Income Tax Act) authorizes Michigan cities to levy a municipal income tax on resident individuals, non resident individuals working in the city, and corporations. Twenty-two cities have availed themselves of this revenue option to supplement property taxes to support municipal finances. Generally, the Act limits the rate levied on resident individuals and corporations to 1%, and 0.5% on nonresident individuals. However, certain exceptions are allowed under the law, including for cities with a population of 600,000 or more (Detroit is the only city that qualifies). A special provision allows Detroit to levy the tax at a rate of 3% on resident individuals, 2% on corporations, and 1.5% on nonresident individuals. Prior to 1999, Detroit taxed individuals at the maximum rates allowed and corporations at 1%.

Public Act 500 of 1998 amended the City Income Tax Act to reduce the income tax rates for resident and nonresident taxpayers in Detroit. Beginning with a tax rate of 3% on residents (1.5% on nonresidents) in 1999, the law provides that the resident tax rate is to be reduced by one-tenth of a percentage point per year, with the nonresident rate reset to one-half of the resident rate. The City’s income tax rates were reduced each year from 1999 until 2003, until the rates were 2.5% for residents and 1.25% for nonresidents.

The reductions were to occur each year for a ten-year period until the new rates were 2% and 1% respectively, provided certain unfavorable financial conditions related to the city, as defined in the law, did not occur. The scheduled rate reductions were part of an agreement related to major changes in the state revenue sharing formula contained in PA 532 of 1998, which guaranteed Detroit a fixed sum of state-shared revenues for 8 years.

Under PA 500 of 1998, the scheduled rate reductions can be halted if the City applies to the State Administrative Board and demonstrates that any three of four conditions are met:
Two consecutive years of withdrawals from the city’s budget stabilization fund or exhaustion of the fund balance;
A year-to-year decline in income tax revenue, after adjusting for inflation, of more than 5%;
A city unemployment rate of 10% or higher; or
A provision which compares the growth ratio of the city’s taxable value with the comparable statewide figure and computes a ratio which must fall below .80.

The City met at least three of the criteria to halt the scheduled rate rollbacks for 2004 through 2007 and for 2010 through 2011. For 2008 and 2009, Detroit did not meet the criteria, but the City Income Tax Act was amended to freeze the rates at the 2007 level. Therefore, Detroit’s income tax rates have been effectively frozen at 2.5% and 1.25% since 2003.

http://www.crcmich.org/column/?p=207
 
yes and instead of fixing the law to save D town they applied it even know they KNEW it would be the death nell for the city.

Is that what a governor is supposed to do ?

fuck the people in their biggest city?
 
They allowed ot to happen so they could PICK the guy to run the place so they could SELL OFF the asets of the city for profit.


gooble gooble asshole
 
state government is NOT in place to kill cities.

what kind of an asshole would do that to his own people?
 
evince said:
A republican asshole is the answer
Click to expand...

Democrats have run Detroit for years, they did this to themselves. Now that the the Republican governor has taken charge, Detroit may have a chance to come back. Leave it to the white man to fix the black man's fuck ups.
 
evince said:
yes and instead of fixing the law to save D town they applied it even know they KNEW it would be the death nell for the city.

Is that what a governor is supposed to do ?

fuck the people in their biggest city?
Click to expand...
He shouldn't fuck them
He shouldn't bail them out either
 
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