Ruling Makes Detroit Biggest City To Qualify For Bankruptcy

English: Renaissance Center, GM World Headquar...

English: Renaissance Center, GM World Headquarters, Detroit, Michigan. (Photo credit: Wikipedia)

DETROIT — Detroit is eligible to shed billions in debt in the largest public bankruptcy ever in the United States, a federal judge ruled Tuesday, while also finding that the public pensions could be reduced during reorganization despite a provision in Michigan’s Constitution.

In ruling that Detroit was eligible to reorganize under federal bankruptcy law, Judge Steven W. Rhodes said the city met every test of insolvency, including failing to pay its debts and being unable to provide a minimum level of basic services to its 680,000 residents.

“This once proud and prosperous city can’t pay its debts,” the judge said. “It’s insolvent. It’s eligible for bankruptcy. But it also has an opportunity for a fresh start.”

Appeals were expected to be filed quickly. Bruce Babiarz, a spokesman for Detroit’s fire and police retirement system, which supports 8,500 retirees, said lawyers were reviewing the ruling and expected to file an appeal by the end of the week. But the case will continue to move forward, with the next step being the city filing a “plan of adjustment.” It is unclear, however, what portions of the judge’s ruling may be appealed.

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Detriot Files For Bankruptcy

Map of downtown Detroit with I-375 and BS-375 ...

Map of downtown Detroit with I-375 and BS-375 highlighted (Photo credit: Wikipedia)

DETROIT — Detroit on Thursday became the largest city in U.S. history to file for bankruptcy, as the state-appointed emergency manager filed for Chapter 9 protection.

Kevyn Orr, a bankruptcy expert, was hired by the state in March to lead Detroit out of a fiscal free-fall and made the filing Thursday in federal bankruptcy court.

A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s tumble toward insolvency.  Detroit lost a quarter-million residents between 2000 and 2010.  A population that in the 1950s reached 1.8 million is struggling to stay above 700,000.  Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.

In recent months, the city has relied on state-backed bond money to meet payroll for its approximately 10,000 employees.

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Detroit’s Davos: Op-Ed Piece From The NY Times

Map of Michigan

Map of Michigan (Photo credit: Wikipedia)

ONCE a year, business and political leaders from metropolitan Detroit travel to an island resort that bans all motorized vehicles and talk about the regional economy.

For me, memories of childhood vacations at that resort, Mackinac Island — the ferry ride, the fudge shops, the horse-drawn carriages — are primarily olfactory.  In the unlikely event I’m ever again hit with the dueling scents of confectioner’s exhaust and horse manure, it would probably trigger some kind of Proustian flashback.

For years, Michigan’s business community seemed bent on flashbacks of its own, to the days when the Big Three automakers towered arrogantly from the safe confines of an insular culture.  But now its buzzwords are “innovation,” “entrepreneurship” and a “21st-century global market.”  This week’s Mackinac Policy Conference has positioned itself as a sort of Midwestern Davos, with a roster of marquee speakers, including Michelle Rhee, Jeb Bush and the hosts of “Morning Joe.”

The topic on everyone’s mind will be the fate of Detroit, which was placed under state control in March by Gov. Rick Snyder.  The governor, a Republican, is attending the conference, and four of the candidates running for mayor in November are scheduled to speak there today — among them, the front-runners: the excellently named former police chief Benny Napoleon, and Mike Duggan, who has a serious shot at becoming the first white mayor of Detroit in 40 years.

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Michigan To Appoint Emergency Fiscal Manager For Detroit

English: City seal of Detroit, Michigan.

English: City seal of Detroit, Michigan. (Photo credit: Wikipedia)

DETROIT — Gov. Rick Snyder of Michigan announced on Friday that the city of Detroit is so snarled in financial woes that the state must appoint an emergency manager to lead it out of disaster.

“There is probably no city that is more financially challenged in the entire United States.  If you look at the quality of services for citizens it’s ranked among the worst.  So we went from the top to the bottom over the last 50 or 60 years,” Mr. Snyder told Detroiters in a town-hall-style meeting that was broadcast live on local television stations across the city.

“It’s time to say we should stop going downhill,” he said.  “There have been many good people that have had many plans, many attempts to turn this around, they haven’t worked.  The way I view it, today is a day to call all hands on deck.”

The state-appointed manager, who could be selected later this month, would ultimately wield powers aimed at swiftly turning around the municipal government’s dire circumstances — powers to cut city spending, change contracts with labor unions, merge or eliminate city departments, urge the sale of city assets and even, if all else failed, to recommend bankruptcy proceedings.

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Motor City Lessons For Reading

City officials were shocked, saddened, thankful and relieved by their three-day bus trip to Detroit that began Nov. 13.

The fast-paced tour, paid for entirely by two local foundations, was to see what progress the Motor City has made in its own painful recovery, and what efforts there might work in Reading.

As Detroit’s Big Three automakers declined, tax revenues dropped and more than half its 1.8 million residents moved out. The city had to cut services such as fire suppression and police from large sections of the city.

But now, with help from foundations and businesses, it’s making numerous coordinated moves to rebuild.

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Michigan And Ohio To Cooperate On Lake Erie Algae

Lake Erie from satellite 2007. Photograph cour...

Lake Erie from satellite 2007. Photograph courtesy of NASA. (Photo credit: Wikipedia)

Officials in Michigan and Ohio promised closer cooperation Wednesday in the quest for solutions to massive algae blooms in Lake Erie, a deadly threat to fish and a turn-off for tourists.

Delegations from both states, including their top environmental protection officials, agreed to push harder for reductions in phosphorus discharges from farms, waste treatment plants and other sources while sharing ideas and supporting research. The U.S. Environmental Protection Agency pledged technical and financial assistance.

“We all agreed that while more research is needed, that shouldn’t be a barrier to taking action now,” said Susan Hedman, chief of the EPA’s regional office in Chicago. “It’s absolutely clear that we need to reduce nutrient loading to the western end of Lake Erie.”

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Neapco Moving Headquarters To Michigan – Today’s Mercury Coverage

Location of Pottstown in Montgomery County

Image via Wikipedia

According to a write up in today’s Pottstown Mercury, Neapco is now moving their corporate headquarters to Michigan.  A Neapco VP says this will have a minimal impact on what’s left here in Pottstown.  Still very sad.

Then, as one reads along, a bomb is dropped.  The article is talking about how manufacturing was consolidated in Beatrice, Nebraska and how the state of Nebraska gave Neapco a $1 million dollar loan.  The expansion of production facilities in Nebraska created 70 jobs. (how nice for Nebraska)

The next paragraph made me absolutely sick.  The same VP, Keith Sanford, goes on to say “no financial incentives to consolidate the company’s manufacturing in Pottstown were offered by any organization in Montgomery County or the borough.”  90 jobs were eliminated in Pottstown as a direct result.  Nebraska offered Neapco financial incentives to move our jobs out of Pottstown!

Well isn’t that just special!  If somebody would have called Harrisburg there is money for these types of things.  Ed Rendell, when not busy yelling at Leslie Stahl, has gotten involved with numerous other communities to keep jobs in PA! 

Considering that jobs are hard to come by in Pottstown, other than fast food and retail, we should have at least tried to offer them something.  It sounds like they might have been receptive.

We have a Keystone Opportunity Zone (KOZ) in this town with one business in it (that I am aware of).  I bet Harrisburg would have come up with money to expand on Queen Street OR build Neapco a new modern facility in our KOZ, which offers tax incentives to businesses!  

We could have kept our 90 jobs and added more jobs.  Instead, Nebraska added 70 more jobs and we lost 90!

Keystone Opportunity Zones are such a breakthrough idea that Business Facilities magazine calls them “the number one economic development strategy in the nation.” By eliminating specific state and local taxes within specific underdeveloped and underutilized areas, communities within Pennsylvania are experiencing economic growth and investment.  

Here is a link to the website where the above quote is from: