BANKRUPT DETROIT MISPLACES $1 MILLION IN DESK DRAWER
How city 'did business' as it slid toward insolvency
Published: 12 hours agoJust as Detroit was preparing for its recent bankruptcy filing – a record-setting move that pulled back the curtain on its massive public debt – it received a payment of $1 million from the local school system.
The payment was promptly put in a city hall desk drawer.
Where it was left for a month.
The stunning report of the mishandling of finances in the deeply troubled city was reported by the Detroit News .
The newspaper said it was in February when the payment arrived, was put away and not found until a month later.
“This is the way Detroit did business as it slid toward its bankruptcy filing, which it entered July 18,” the News explained.
The bankruptcy exposed $18 billion of long-term debt for a city featuring thousands of abandoned structures, broken street lights and 58-minute waits for a police response.
Kevyn Orr, the city’s emergency manager, said the payment is an example of what’s wrong.
“Nobody sends million-dollar checks anymore – they wire the money,” Orr spokesman Bill Nowling told the newspaper.
Part of the needed repairs include fixing systems that track debts and payments, officials explained.
Among the headaches that must be faced: hand processing of income-tax receipts, the 150 full-time workers needed to handle the payroll system and sometimes untraceable routes for funds.
“Detroit’s antiquated accounting processes have meant some bills go uncollected for as long as six years, according to Orr, cutting funds that could buy new squad cars, emergency vehicles or computers. Victims of heart attacks in Detroit are likely to die because of slow responses to emergency calls since so few ambulances are running, Orr said in an interview,” according to the News.
WND reported just a day earlier that Chicago Mayor Rahm Emanuel is warning that America’s third largest city could follow Detroit into bankruptcy.
“Until we pass meaningful pension reforms in Springfield, the outlook for future years is unsustainable,” Emanuel concluded bluntly, anticipating a current budget crisis that could develop into a full-fledged budget meltdown within the next four years.
Emanuel noted that Chicago’s current budget deficit of $338.7 million is expected to grow to $1.6 billion by 2016, due largely “to ballooning obligations under current pension legislation.”
Compounding the fact that pensions for public employees are less than 40 percent funded, a decline in business activity during several years of prolonged economic downturn and an exodus of higher income residents from the city have resulted until recently in a dramatic decline in Chicago’s tax revenue.
In a column for WND , financial expert Porter Stansberry noted that Detroit is proof that socialist-progressive agendas don’t work, and the United States is in worse shape than its cities.
“It is shocking to realize that only 50 years ago, Detroit was the shining example for the world of capitalism and civil society. It doesn’t take long to destroy wealth, ” he wrote.
“Now consider this: Detroit went bankrupt with total debts of around $20 billion. That’s roughly $28,000 per remaining citizen. That’s nothing. The debts the U.S. government has amassed over the same period (the last 50 years) are vastly larger,” he said. “Today, all Americans owe more than $16.7 trillion on the federal level – that’s nearly $54,000 per citizen and nearly $150,000 per taxpayer. How many Americans do you think realize that our federal government is twice as bankrupt as Detroit?”
Read more at http://www.wnd.com/2013/08/bankrupt-detroit-m...WG0dPe1.99
