A vandalised home covered with red spray paint and smashed windows, sits vacant in an east side neighborhood of Detroit.
The street used to be a busy hub of families, but its occupants have fled their homes leaving whole blocks empty and dark.
The city’s budget problems have deepened to such an extent that it could run out of cash in a matter of weeks or months and ultimately be forced into what would be the largest-ever Chapter 9 municipal bankruptcy filing in the United States.
Ghost town: A vacant and blighted home, covered with red spray paint, sits alone in an east side neighborhood once full of homes in Detroit
The story of Detroit’s decline is decades old – its tax revenue and population have shrunk and labor costs have remained out of unfeasible
Signs of decline are everywhere in Detroit – crime is rising with the murder rate of one per 1,719 people last year, more than 11 times the rate in New York City.
The jobless rate is above 18 percent, more than twice rate for the country as a whole.
At the Detroit Auto Show earlier this month, luxury was in the air.
Pricey new Bentleys and Maseratis glittered – including a Maserati 2014 Quattroporte with a $132,000 price tag; U.S. Cabinet Secretaries and dignitaries rubbed shoulders; and many of the well-heeled attendees ponied up for a $300-a-ticket black-tie charity ball.
Cuts: Spray paint on the front of a vacant and blighted home says the gas and water utilities have been turned off in the east side neighborhood
Running out: The city’s budget problems have deepened to such an extent that it could run out of cash in a matter of weeks or months
But in a city that is slowly dying, the glitz didn’t extend much beyond the Cobo Center exhibition hall.
General Motors Co (GM.N) and Chrysler (FIA.MI), which along with Ford Motor Co (F.N) gave the Motor City its identity, survived near-death experiences after filing for bankruptcy during the financial crisis.
Now, Detroit itself is edging closer to a similar precipice, only unlike the automakers, its chances of getting a federal bailout are almost nonexistent.
The story of Detroit’s decline is decades old: Its tax revenue and population have shrunk and labor costs have remained out of sync.
Bankrupt: Detroit could ultimately be forced into what would be the largest-ever Chapter 9 municipal bankruptcy filing in the United States
Frustrated by the lack of concrete progress, Michigan Governor Rick Snyder, a Republican, last month appointed a team to scour the city’s books.
The audit could result in a state takeover of Detroit’s finances through the appointment of an emergency financial manager.
Such a manager, who would seize control of the city’s checkbook, could then propose federal bankruptcy court as the best option.
Snyder, who has called the situation ‘a crisis in terms of financial affairs,’ said the team would deliver its report in February.
Investigation: Frustrated by the lack of concrete progress, Michigan Governor Rick Snyder, a Republican, last month appointed a team to scour the city’s books‘Detroit is teetering on the verge of bankruptcy after the City Council has failed to make the necessary cuts to deal with having a smaller population,’ said Rick Jones, chairman of the Republican majority caucus in the state Senate.
Jones, who has indicated he does not favor a bankruptcy, said he would like to see an emergency manager installed to fix the city’s problems. If that failed, there would be a case for finding a way to shrink the Detroit municipal area, he argued.
Detroit’s population is now just over 700,000 – down 30 percent since 1990 – but the city still has to provide services to an area encompassing more land than San Francisco, Boston and the borough of Manhattan.
