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| Authored by: PJ on Monday, July 22 2013 @ 05:17 AM EDT |
| Here's an article that explains in the Detroit News. It's another
story like Greece, where banks loaned in ways
that make it impossible to pay
back if things go south,
and they did. Then the banks let people lose their
jobs
and suicides jump off buildings rather than cut back
their payback. So
cities then cut back on police and
firemen and other services and sell off
assets to pay back the bondholders.
Blech. [ Reply to This | Parent | # ]
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| Authored by: mvs_tomm on Tuesday, July 23 2013 @ 09:59 AM EDT |
Michigan's emergency manager law was overturned bu the voters in a referendum in
2012. The emergency manager law gives the governor the authority, at his
discretion, to appoint an emergency manager to take control of a city or a
school board that he deems to be having financial difficulty.
The legislature then passed a similar emergency manager law, this time including
an appropriation in the law. The Michigan constitution prohibits a referendum
on any appropriations bill.
This has been a tactic used with increasing frequency in recent years. The
legislature has been quite keen to attach a minor appropriation to any bill that
it does not want the people of the state to have an opportunity to overturn.
The governor contends that Detroit's financial troubles are all of its own
making. That is not entirely true. The state has made many promises to the
city that have been broken. One of them was a deal that the city would lower
its income tax rate and the state would keep revenue sharing levels constant.
The city cut its income tax rate. The state cut the revenue sharing to the
city. The city was unable to raise the tax rate to its previous level because
state law prohibits it. In addition, the state legislature further cut
Detroit's income tax rate last year.
Tom Marchant[ Reply to This | Parent | # ]
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