In the annals of Detroit’s history, the city is distinguished in so many glorious ways, and even some inglorious. On Thursday, the Motor City officially tanked when the emergency financial manager filed for bankruptcy.
Now Detroit, with a population of 700,000—the great majority of whom are African-American—is the largest municipality in the nation to file for bankruptcy. It is more than double the population of Stockton, Calif., which entered Chapter 9 bankruptcy last year.
And with a debt of $18 billion to $20 billion, Detroit is also the largest municipality to file for bankruptcy. The action, however, is in process and may take two to three months before there’s a final determination of matters.
“This was all inevitable,” said Ron Lockett, a city employee for a number of years. “It was more a matter of when than if.”
The decision to take the city’s financial situation to court, a slowly deteriorating economic malaise decades in the making, came after several months of front-page negotiations between Kevyn Orr, the emergency financial manager appointed by Gov. Rick Snyder, and union representatives and city leaders.
Key to the dispute and the bankruptcy is what happens to the pension fund for former employees, many of whom are struggling to make ends meet on fixed incomes.
“This is a difficult step,” said Snyder, a Republican, “but the only viable option to address a problem that has been six decades in the making.” The governor, with approval from a Republican-controlled Legislature, invoked Public Act 426, which grants the state the right to take over a city.
One of the things that may have prompted Orr to move toward bankruptcy was an imminent hearing of a lawsuit being filed against him and the state to block the filing. The lawsuits are now null and void.
But Circuit Judge Rosemarie Aquilina said the filing violated the state constitution since it threatened the pension benefits for the city’s retirees. This action was quickly challenged by Attorney General Bill Schuette, who, on behalf of the governor, set in motion an appeal. For the moment, there is an impasse, and much like the city’s condition, things are in limbo.
There are almost as many theories about the collapse of the city as there are creditors awaiting the outcome of the filing. While it is possible to trace Detroit’s fall into disgrace back to the 1920s when the entire nation was hit with the Great Depression, there are a slew of contemporary factors that explains the economic decline of a metropolis that, at one time, was the fourth largest in the nation with nearly 2 million residents and a reputation as the motor capital of the world. Those factors include Black and white flight from the city, particularly following the riots of 1943 and 1967, which irreparably damaged the tax base; high unemployment because of the dwindling job market in automobile manufacturing and related industries; and a succession of poor city leaders and their addictive malfeasance.
A lot of finger pointing is going on now, but that hardly answers a dilemma that promises to be worse before there’s any sign of improvement. While downtown and midtown Detroit are showing sprigs of renewal, the outer precincts of the city are mired in worn or burned out buildings, rough streets and unsafe neighborhoods.
“But I am optimistic,” said one native Detroiter who asked that her name not be used. “A lot of my friends see Detroit as a half empty glass, for me it’s half full.” But the question remains: How long will the glass even be available or seeable in a city where almost half the street lights are out?
“Motown the Musical” is racking up the dollars on Broadway while Detroit is desperately in need of a huge bundle of municipal bonds to get it over another economic hurdle.
Hey, bring the musical to Detroit.