Report: Detroit Could be Broke in One Week, Faces State Takeover
- Posted on June 9, 2012 at 7:24pm by
Becket Adams
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DETROIT (The Blaze/AP) — Detroit could run out of cash in a week if a lawsuit challenging an agreement with the state to fix the city‘s finances isn’t dropped, the city’s new chief financial officer said Friday, raising concerns of a full-fledged takeover by the state.
“If our city runs out of money, there is no bigger crisis that we would have in our city,” Detroit Mayor Dave Bing said Friday morning, adding that his frustration level is “off the charts,” according to the Detroit Free Press.
Finance chief Jack Martin offered his assessment a day after the state treasurer’s office told city officials Detroit is at risk of losing $80 million in revenue sharing because of the lawsuit. He said the city will be broke by June 15. He said the city should be able to make payroll for employees, but it will be operating under a deficit.
Bing, who wants the lawsuit withdrawn, told reporters Friday that the agreement with the state could be violated if the city runs out of money.
“It’s an emergency,” Bing said. “It is a crisis and we’ve been in a crisis for a long time. This just ups the ante more than anything else. And I think, from a leadership standpoint, it’s incumbent upon us as leaders to deal with this expeditiously, which means ASAP.”
Bing planned to meet Friday morning with City Council to discuss the situation, but that meeting was pushed back to Monday.
Detroit Corporation Counsel Krystal Crittendon last week filed a lawsuit with the Court of Claims in Lansing asking that the consent agreement be overturned. The suit claims the state already owes Detroit $224 million in past revenue sharing and that Michigan law prevents the city and state cannot from entering into a consent agreement if one of them owes the other money.
Michigan Gov. Rick Snyder has said the state doesn’t owe Detroit any money. The state wants Bing to compel Crittendon to drop the lawsuit.
However, Council President Charles Pugh said he and other council members are urging Crittendon to “stand her ground.”
As for the warning that the city might be broke next week, Pugh said “We feel like that may be a bit of an exaggeration,” according to the Detroit Free Press.
Bing said in a statement Friday that he has urged Crittendon to withdraw the lawsuit but that the city charter gives her “the independent right to take whatever action she deems reasonable,” including judicial action, if she thinks the charter has been violated.
“It’s unfortunate that as an appointee of the mayor’s office she does not report directly to me with the change of the charter,” Bing said. “She really doesn’t report to anybody.”
Martin said at least $35 million of the $80 million has been withdrawn from the city’s escrow account. A bond sale was approved earlier this year by the City Council with just over $80 million in interim financing backed by state revenue sharing due Detroit.
Detroit City Council 6, 22, 2009 (via tellusdetroit.com)
The bond sale is not part of the consent agreement, Treasury spokesman Caleb Buhs said Thursday, but the city’s failure to meet its obligations to the sale could lead to it losing revenue sharing. Without the millions of dollars from the state, Detroit would find it difficult to meet payroll and other bills. Any further slippage in the city’s already poor financial standing could lead the state to reconsider the effectiveness of the consent agreement.
Bing, the City Council and Gov. Snyder approved the agreement in April that would allow the state’s involvement in correcting an accumulated budget deficit of more than $200 million and billions of dollars in structural debt. In return, Snyder agreed not to hand the city’s finances over to an emergency manager.
Read the full DFP report here.
The Associated Press contributed to this report.





















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Comments (194)
GaryInTheMiddle
Posted on June 9, 2012 at 8:33pmHopefully other dem. run cities wake up before it’s too late.
Report Post »Mrs. Bowers
Posted on June 9, 2012 at 9:34pmSo true!!!
Report Post »rangerp
Posted on June 9, 2012 at 10:26pmHmmmmm, Detroit.
A city run by a black democrat mayor, and done so for decades.
A city that was a model city for LBJ and liberals in their war on poverty
A city that is basically owned by the unions
A city that the libs destroyed.
Report Post »lukerw
Posted on June 9, 2012 at 10:47pmThey all got in this position… believing in Robin Hood… and not being Educated as to the functioning of Capitalism! Pigs will fly… before there a Cure for Stupidty!
Report Post »drattastic
Posted on June 9, 2012 at 11:04pmSeeing the mayor and the city council tells me all I need to know as to why the city has failed . Go ahead and elect some more DUMBOCRATS you morons. Dumbocrats are great at bankrupting things ,Detroit looks like a 3rd world country.
Report Post »Chancellor
Posted on June 10, 2012 at 12:55amNo it happened in Buffalo NY. and it went into State takeover and nothing
changed. The problem is most of the people living there don’t pay taxes of
any kind. Those that are left leave the city to get away from the out of reach
taxes. Same thing happened in Buffalo and the city was under a 5 person panel
for 3 years and everything was paid for by the state. Now the states broke!
Report Post »historyguy48
Posted on June 10, 2012 at 6:51amDream on sweet dreamer and head back to your “reality TV”. What needs to be done won‘t be done because it can’t be done without strong leasdership and political will. We do not have either!
Report Post »Meyvn
Posted on June 10, 2012 at 7:08amand when Detroit falls… It’s residents can all stay there and fix it. Don’t bring your failure south, we don’t have room for it and will fight it fiercely.
Report Post »poorrichard09
Posted on June 10, 2012 at 8:13amMaybe they can get a loan from the IMF like Greece, Spain, etc etc.
Report Post »old white guy
Posted on June 10, 2012 at 8:21amhmmm. cities going broke, states going broke, federal government going broke. common denominator, african american run administrations????
Report Post »Walkabout
Posted on June 10, 2012 at 8:42amI hope the state government does not take over Detroit. There are more than enough Democrat African Americans, who play the race card. With a Republican state legislature & governor, some politicians are just waiting for Republicans appoint a committee to straiten out Detroit’s finances so they can scream racism.
I think the Detroit city council & mayor have to experience vendors not providing services & goods, because the vendors were stiffed by Detroit the last few times or for 2 or 3 months. When the city council & mayor no longer can provide, then maybe just maybe they will wise up. The people will demand fiscally sound government.
If the citizens do decide to riot, they should remember to not head north west toward Dearboristan, because they will not put up with it. the race card will not work with them.
Report Post »G-WHIZ
Posted on June 10, 2012 at 10:28amOhh….you dreamer, you!! There hasn”t been a Dem-run city or state which has been in the black$$, or had anything like a surpluss….ever. Look at our fair country….a great surpluss of uber-debt! We have had a majority of [D.] presidents and everyone except JFK(TAX-CUTS!) has given us the gift of tax-and-spend-and-defficites as far as oureyes can see! we have allowed TheBuilderburgs and G.soros to force their choice-presidents uppon us since LBJ, and fuge our voting with corruption, “just complaints” and NO action!
Report Post »SELECT
Posted on June 10, 2012 at 3:26pmif the financial advisory board members appointed by the mayor, they will be democrats and black. enough said…..?
Report Post »Jaycen
Posted on June 11, 2012 at 1:42am@Walkabout
Unfortunately, there are plenty of comments in this thread to scream racism.
The only obvious problem is the mentality of those nominally in charge. The same bad results would occur if everyone in the room was white and if all those white people held the same mentality.
I can’t tell you how much I wish the racists would find another sweet hangout spot on the internet. I bet the Nazi Worker’s Party website would be thrilled with you guys. Plus, a lot of you guys with union mentalities would be welcome, too!
You might think about it. I‘m sure it’d be nice if no one criticized you for your repugnant world-views.
Report Post »ltcwilly
Posted on June 11, 2012 at 8:21am@Drat….You’re giving third world countries a bad name.
Report Post »Yeah_Buddy
Posted on June 11, 2012 at 10:54amLooking at the council members, I’d say ban Big Gulps!
Report Post »AJAYW
Posted on June 9, 2012 at 8:29pmwhat else could you expect with obama- likes- running it. Just give it to the people and fence it in.
Report Post »HorseCrazy
Posted on June 9, 2012 at 10:01pmI say demolish the entire town turn it into farmland. scrap the metal, reuse any useable building materials and just move these folks out of there. many cities need to be repurposed.
Report Post »CatB
Posted on June 10, 2012 at 1:55amI agree …. Detroit has been bringing the rest of the state down … demolish it .. the whole state would be better off.
Report Post »IMAWAKENOW
Posted on June 10, 2012 at 9:22amI like the idea of buldozing and repurposing but how do you change the mindset of the people there? I know we have plenty of the hand out crowd standing around waiting to take it from me or anyone else that works and pays taxes in my state, we don’t need any more.
Report Post »Fire half the people sitting around that table and cut the pay of those that are left. If yoy can‘t pay for it then don’t buy it. It also looks like there is enough work cleaning up that city there should be no one getting a dime of assistance without working for it.
4xeverything
Posted on June 10, 2012 at 10:32amOOOOO, I like it! We fence it in and then send in Snake Plissken to demolish it and air it live on the OWN (Oprah’s network). We’ll call it Escape from Progressivism.
Report Post »Meyvn
Posted on June 10, 2012 at 2:24pmSend them all to live in one of those empty cities in China. Then we can make bets on how long the cities will last before they end up looking like Detroit. It would be a interesting experiment. Hell, I am even up for paying China to let us try it.
Report Post »Jaycen
Posted on June 11, 2012 at 2:06amRacists and Nationalist Progressives. Yuck! How did The Blaze fall so far?
Do any of you call yourselves Constitutional Conservatives? If you do, you’re wrong:
“I say demolish the entire town turn it into farmland. scrap the metal, reuse any useable building materials and just move these folks out of there.”
“I agree …. Detroit has been bringing the rest of the state down … demolish it .. the whole state would be better off.”
“I like the idea of buldozing and repurposing…”
“We fence it in and then send in Snake Plissken to demolish it and air it…”
“Send them all to live in one of those empty cities in China.”
These are the comments I see on HuffPo and any number of Progressive websites. We can just take all their land and property? None of the human beings in Detroit deserve basic Natural Rights? Is it because they don’t think like you do, or do you just want to feel like you have power over someone else’s life?
I don’t like the idea of demolishing Detroit. The city is corrupt and decaying, but putting YOUR jackboots on the necks of those people probably isn’t the most free example of a solution. When I think of Detroit and their problems, a lot of solutions come to mind, and not a single one sounds like any of yours. I think you folks hang out on the wrong website.
Good luck with all your hatred and “final solution” mentalities.
Report Post »ltcwilly
Posted on June 11, 2012 at 8:26am@Jaycen…..come on, man. If you have spent any time at all on “conservative” sites such as The Blaze, you know that comments come in roughly three categories: Reasoned and intelligent; outright stupid; sarcastic. You have to learn to discern between the three or you’ll go insane….especially here.
Report Post »Dallasmarine
Posted on June 9, 2012 at 8:28pmWhen it goes under I’ll make the first bid. 250.000.00 PESOS !
Report Post »Paul
Posted on June 10, 2012 at 1:14am2 camels and a chicken !
Report Post »NLN
Posted on June 10, 2012 at 8:56am15 egg rolls.
Report Post »G-WHIZ
Posted on June 10, 2012 at 10:31amI’ll pay you 2cts to keep it!!
Report Post »gbfreak
Posted on June 9, 2012 at 8:25pmWhat???? The poster child city of liberal ideolgy is a failure? Wow…how’d that happen?……lol
Report Post »sn000zey
Posted on June 9, 2012 at 11:48pmThe answer to the problem is simple… Just RAISE taxes!!! Its not that there socalist ways dont work. They just need to do a little bit more of it, then everything will be ok.You can ask any liberal democrat. That many people that are smarter than the rest of us cant be wrong.
Report Post »starman70
Posted on June 11, 2012 at 9:37amNot olny raise taxes so that any working people and business owners are forced to leave but let the city be occupied and run by those who have NEVER worked or paid taxes in their lives. Here you have the finest example of the Democratic Party’s utopia. If the liberal Democrats have their way, every city in America will be in the same fix. The reason, unmitigated spending. Union contracts which are out of sight, politicians making and then keeping promises of utopia with no tax revenues with which to pay for the extravigances and just plain total mismanagement by city officials.
It’s high time that the voters in any state, facing the takeover of any city like Buffalo or Detroit, vote in govenors like Governor Walker of Wisconsin. Those voters were sick and tired of being run over by unions and mamby pamby Democrat political hacks. CONGRATULATIONS WISCONSIN!!! YOU DID IT!!! Now it is time for the hard working taxpayers and business owners of New York and Michigan and every state which will face the takeover of the any city’s finances and have to bail out any city in their state to follow suit.
Report Post »YesNdeedie
Posted on June 9, 2012 at 8:25pmAnd, the very same corrupt, over-their-head, non-qualified type administrations that have run Detroit into the dark abyst over the years are now seated in DC.
Report Post »semihardrock
Posted on June 9, 2012 at 8:24pmI SAY….Give it to Democrats to PROVE to the world that their ways are correct and will “turn the economy around” using their laws and way of life…..
OH WAIT…..They already showed the world what they can do…. and Detroit IS the example…..
Report Post »Magyar
Posted on June 9, 2012 at 8:23pmThis disaster is what happens when an entitlement citizenry, unions and democrats all coalesce in one place!
Report Post »Nod
Posted on June 9, 2012 at 9:39pmYou hit the nail on the head!
Report Post »OklahomaBound
Posted on June 9, 2012 at 9:43pmThey need to put a fence up around it, if you let the animals out they’ll just go infect another city and bring that one down too. The worst punishment you can give a liberal is to make them stay and live within their own mess without bailing them out.
Report Post »possom
Posted on June 9, 2012 at 8:19pmGood bye detroit! HAHAHHAHAHAAHAH
Report Post »BOMUSTGO
Posted on June 10, 2012 at 12:44amThat shining city on a hill….What a trash heap!!..Just remember…… “Socialism Rocks!!!
Report Post »hauschild
Posted on June 9, 2012 at 8:18pmYet another “Mission Accomplished!” moment for liberals and progressives.
Report Post »Meyvn
Posted on June 10, 2012 at 7:35amExactly. They would like to do this to all states and have already heavily damaged some of the largest cities in the U.S.
Report Post »G-WHIZ
Posted on June 10, 2012 at 10:38am…and they will do it to all of the USA to make that socio-eutopia like Nazi-Germany or Mau-China(…). Oooh it just works-out just sooooooooo goooood!!
Report Post »matinva
Posted on June 9, 2012 at 8:04pmMemo to Democrapheads everywhere:
If this is what you want for all of America, just keep pushing your thoughtless, empty agenda on the rest of us. Socialism doesn’t work. Get over it!! Unions are the cause of all this. Get over it!! Democrats are losers!! Get over it!! Change your thinking or YOUR town will look just like this….SOON!!
Report Post »cykonas
Posted on June 10, 2012 at 2:34pm@LUKERW
Do not heap… the failure upon the People… but upon the Leaders who promised Social Benefits
___________________________________________________________________________________
I can’t agree totally with that sentiment. Just like a Ponzi Scheme ala Bernie Madoff; they don’t work unless you have greedy people to fuel them. When someone believes they can make superior returns regardless of market conditions they fuel the success of the Ponzi schemer.
When greedy people believe that they can make a good living without bustin’ it they fuel the success of socialistic governments.
The success of the Ponzi Schemer and the Socialist government are short lived and those in charge are at fault. But, I can’t let the greedy people off the hook. It wouldn’t work without them. In the case of Detroit you add greedy and corrupt unions and it has been a foregone conclusion that it would come to this.
I lived in Detroit from 1955 until 1963, It was a great place. Full employment. Virtually no crime. Then came the entitlement society and the Unions told people that they should make big money whether they worked hard or not, and the governments (the State of Michigan government has a hand in this too) started passing out money as de facto graft when you didn’t work at all! When that happens, this is what you will get. Every single stinking time. I’m still a Tigers fan though!
Report Post »Forced_Union_Worker
Posted on June 9, 2012 at 8:00pmI live just north of Flint, Michigan, about an hour north of Detroit. I’m old enough to remember when Detroit was truly a great city, a gem of the mid west. Sadly, those days are long gone. The last time I visited Detroit it nearly broke my heart. The city is falling down around the residents. Half the population is gone. The auto jobs that fueled Detroit have left never to return. The schools are some of the worst in the nation, most kids don’t graduate and the ones that do are functional idiots. Yes, the people of Detroit are mostly to blame for this disaster, but that doesn’t limit our responsibility to find a way to help rebuild this once vibrant city.
Report Post »ChiefGeorge
Posted on June 9, 2012 at 8:19pmLooks like Detriot might be Americas first large American city to become a real ghost town. More to follow if the cities are managed by what appears to be knuckleheads who are more concerned about power, titles, how much money they can grab for themselves and care nothing about really fixing anything. Who will the people at that table blame for their mistakes…..let me guess, GWB?
Report Post »lukerw
Posted on June 9, 2012 at 8:34pmDo not heap… the failure upon the People… but upon the Leaders who promised Social Benefits… and delivered Graft! Michigan is the typical Liberal State… and Detroit a Victim of Ideology!
Report Post »MAMMY_NUNN
Posted on June 9, 2012 at 9:07pmAnd what’s their answer to improve the economy ?
Report Post »Build more Casino’s no joking
How about just hitting Granny over the head after she cash’s her SS check.
bdandsl
Posted on June 9, 2012 at 8:00pmDetroit, one of the wonderful results of unions.
Report Post »BO_Bill
Posted on June 9, 2012 at 8:46pmDo you really believe that unions are the principle reason for Detroit’s collapse? Most residents don’t work. Despite a $15,000/child school budget, half of the city is illiterate.
You know, question with boldness, and all that. Even if they call you a name.
Report Post »MAMMY_NUNN
Posted on June 9, 2012 at 9:13pmYes unions have a large portion of responsibility everyone works as if they have a union job never taking inititive to get the job done but rather stand there waiting for someone else to do the job for them.
Report Post »MAMMY_NUNN
Posted on June 9, 2012 at 9:15pmYou’ve seen them 10 to 15 road workers standing there watching as 1 man shovels.
Report Post »LameLiberals
Posted on June 9, 2012 at 8:00pmEveryone around that table is a die hard communist in denial and corrupt politician who ran the city into the ground. FIRE THEM ALL! ! Put Herman Cains and David Webb’s in charge. They will clean it up. Kick the unions out and maybe make the other races who fled Detroit come back.
Report Post »MEANS2RESIST
Posted on June 9, 2012 at 9:38pmI’ll bet those city councilpeople are sitting pretty though. I’d like to know what their salaries are.
Report Post »MEANS2RESIST
Posted on June 9, 2012 at 9:46pmNevermind….http://sunshinereview.org/index.php/Detroit_employee_salaries#cite_note-2 CC members avg $73K while Mr Mayor McCheese pulls in $158K or so.
Report Post »right
Posted on June 9, 2012 at 7:58pmHow long have the dems been running Detroit? How many other cities have they run into the ground?
Report Post »Chicago and New Orleans to name 2 more. Thanks guys! Good job. Keep your folks on welfare, keep control of them. Your results SUCK!!
jacques.daspy
Posted on June 9, 2012 at 10:00pmNew Orleans hopefully, has averted a disaster because of a disaster. Katrina resulted in the exit of many of the majority minority that had run the city for the past thirty five years. The same corruption, that incidentally, accounted for much of the city’s disaster. The federal government has realized that the city is now a minority minority city. They are however, building new “mixed income” housing at $240,000 each in the hopes of luring the minority, or their Title 8 clients back. So far, they only leadership position that the city has reacquired is the top of the national murder rate.
Report Post »BTC55
Posted on June 9, 2012 at 7:56pmBulldoze it.
Report Post »LameLiberals
Posted on June 9, 2012 at 8:01pmThey are and ALL TAXPAYERS are paying for it.
They are bulldozing the empty homes and making it into farmland which of course taxpayers pay for again by paying the farmers who are not really farmers anyway to NOT grow crops. .
Report Post »MAMMY_NUNN
Posted on June 9, 2012 at 9:19pmIt‘s bad news for other cities though cause the rat’s got to go somewhere.
Report Post »TulsaYeeHaw
Posted on June 9, 2012 at 7:53pmThe Workers Paradise is on display.
Report Post »WAY TO GO COMMUNISM!!!
Constructionist
Posted on June 9, 2012 at 7:52pmI think every Keynesian economics class should have a class fieldtrip to Detroit.
Report Post »hatchetjob
Posted on June 9, 2012 at 8:09pmWill we get to feed the animals?
Report Post »MFHorn3
Posted on June 9, 2012 at 8:10pmIt’s a good idea, but I’m pretty sure the Keynesian professor would teach the students that, ” not enough money was spent to stimulate the local economy.” Being a Keynesian means never having to admit you were 100% wrong about economics. Inspite of the economic meltdowns all over the world, you still hear Keynesians saying.” the government needs to borrow and spend more, not enough has been done.” It would be comical if it weren’t so freaking pathetic.
Report Post »barber2
Posted on June 9, 2012 at 7:52pmLawsuits..crisis..overspending..in- fighting..anger..accusations…Blame Game…. Yes, Detroit has “ Democrat Party ” written all over it ! Wonder how their Occupy is doing ?
Report Post »The_Almighty_Creestof
Posted on June 9, 2012 at 7:49pmCheck to see if Kurt Russell is free to star in “Escape From Detroit” …cause if they made it one giant prison, I’d go for the wall expense : )
Report Post »eyestoseeearstohear
Posted on June 9, 2012 at 7:49pmAND, FOLKS….
THERE YOU HAVE IT…
THE GREAT WORK OF THE SOCIALIST IN CHIEF!
PLANS ARE GOING EXACTLY AS HE HAS DESIGNED THEM.
Detroit – you have YOUR POTUS to thank for the state of your city.
ARE YOU HAPPY NOW?
He’s got 49 to go….oh wait…according to him it’s about 56 to go!
Report Post »Puddle Duck
Posted on June 9, 2012 at 8:54pmWhat, there’s no more Obama money ?
Report Post »BOMUSTGO
Posted on June 10, 2012 at 12:51amMoochelle found his stash and went on a couple of vacations.
Report Post »nighttrainno9
Posted on June 9, 2012 at 7:48pmDetroit has been broke for years,decades really. When I lived in MI. thirty years
Report Post »ago all the tax money paid by people north of town line 46 was poured into the
rat holes of detroit, flint and pontiac, to no avail I might add. The blacks tore things
down faster then they could be put up. Southeast MI is a racial mess, the state
of michigan would be better off to give the deed to that area to canada and see
if they could do anything with it.
LameLiberals
Posted on June 9, 2012 at 7:56pmI haven’t been back in years and refuse to go back even to visit famly. Michigan is full of left loons and now being overrun by Muslims (have you been to Dearborn?)
I saw the writing on the wall long ago and left as soon as I graduated from high school.
Report Post »dirtypotter
Posted on June 9, 2012 at 8:43pmThe Canadians might declare war on us for that
Report Post »NJONY
Posted on June 9, 2012 at 7:47pmWell this is a great example of what Liberalism/Democrats and unions can do to a city. Every city should look at Detroit and run the other way.
Report Post »marcus_arealius
Posted on June 9, 2012 at 7:43pmTake Detroit to Hard Core Pawn, maybe the family will buy it, for 1 cent on the dollar. The owner Les LOVES Detroit !
Report Post »Patriot of My America
Posted on June 12, 2012 at 8:02pmHard core pawn will have all the remaining wealth remaining in Detroit. Think Detroit and also think this mantra. Democrats, demolish Detroit… Now say it over and over and over… That is the new Detroit mantra… As we speak D-9 Cat Bull Dozers are razing entire square city blocks in the Motor City..
Now repeat after me ” Democrats demolish Detroit. …. …. … … …
Report Post »barber2
Posted on June 9, 2012 at 7:42pmShades of Greece ! All of that entitlement spending. All of that Stimulus Spending . Still in a hole ? Now what could possibly be the cause of that ? George Bush ? The Tea Party ? The rich bankers / CEOs / Wall Street ? Just KEEP SPENDING like the Obama / Krugman Lefties keep insisting. Raise that deficit. Blame someone ! Shades of Greece ! Shades of Stupidity.
Report Post »Warpath18
Posted on June 9, 2012 at 7:40pmBut the real question is, would Michigan take it? Or would they try to trade it to Canada? Hmmmm….
Report Post »MAMMY_NUNN
Posted on June 9, 2012 at 9:29pmAs a resident I prefer the Canadian route if you look at Michigan it is a logistical nightmare for trade routes the best hope would be make it the countries largest prison.
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