Governor Snyder has declared that Detroit is in a “State of Financial Emergency” Detroit has a huge budget deficit and tons of debt and is issuing worthless bonds to borrow money. (If this reminds you of how the country is now being run, that’s not a coincidence.)
So why is Detroit such a disaster? Let’s start with the mismanagement. The Detroit Police Department misstated its number of employees by 20 percent.
Detroit is owed hundreds of millions of dollars, but no one can seem to figure out how to collect it. The 36th District Court collection rate is at %7.7. This is really, really bad. The Chief Judge is complaining that his budget isn’t big enough and is proposing to sue the city over it. Good luck collecting it.
Oh and 47 percent of Detroit property owners aren’t actually paying their taxes.
The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city’s taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.
Delinquency is so pervasive that 77 blocks had only one owner who paid taxes last year.
Detroit relies on a shrinking sliver of businesses and neighborhoods to pay the bulk of the bills. The three casinos, General Motors Corp., DTE Energy, Chrysler Group LLC and Marathon Petroleum Corp. paid 19 percent of collected property taxes. Five city neighborhoods, most of them downtown and along the river, paid 15 percent of the city’s taxes and represent only 2 percent of the city’s total parcels. In all, only 41 percent of the city’s parcels produced tax revenues last year because of delinquencies and a large number of tax-exempt land.
You can see why General Motors had to be bailed out. If it hadn’t been, Detroit would be in even worse shape.
“Why pay taxes?” asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. “Why should I send them taxes when they aren’t supplying services? It is sickening. … Every time I see the tax bill come, I think about the times we called and nobody came.”
This is what living in a failed state looks like. A state takeover by Gov. Snyder may have a shot at fixing this mess. But Mayor Bing is still overlooking the obvious solution.