So much is still up in the air with Detroit -- U.S. Bankruptcy Judge Steven Rhodes will decide whether to adopt the city’s cost-cutting plan following a trial that begins in August– that it’s not clear whether Detroit will be positioned to succeed a year from now, Mike Wilkinson writes in Bridge magazine.
But we can ask questions of its recent past to get a hint at its future: Does the city generate enough money to fix what ails Detroit if billions in debt are cut? Are the city’s costs too high? Does it pay its workers too much? Are pensions too generous? Can the city endure a reduction in both spending and revenue and revive what is by most measures the most dysfunctional large city in America?
“I think that’s one of the great questions coming out of bankruptcy: What is the budget going to be and what does the city need it to be?” said Eric Scorsone, a Michigan State professor and expert on city finances who is writing a book about Detroit’s financial history dating to the 1950s.
Wilkinson finds Detroit has more revenue than most cities, but much of the money comes from non-Detroit sources. Resources are dwindling, and the work force and its salaries have been cut to the bone. But the city is also carrying a huge debt to former workers – many of whom worked for the city when it was twice as big as it is now.
