Post-Bankruptcy After a Year: The Good News and the Big Concerns Ahead
November 8th, 2015, 3:33 PM
Question marks still hang over Detroit's future finances, as you may figure.
First the good news, according to a Detroit Free Press report by Matthew Dolan, Susan Tompor and John Gallagher about the year since a federal judge approved Detroit's bankruptcy exit plan,
The city has more than enough cash to pay daily bills, the paper reports. Also:
- Thousands of streetlights are replaced.
- City retirees get pension checks.
- The Detroit Institute of Arts still has valuable paintings.
But real concerns are down the road, particularly when it comes to the city pension fund. The paper reports that a multibillion-dollar pension bill starts coming due in less than a decade.
The city is on the hook to make a balloon pension payment estimated at more than $100 million in 2024 alone. But if the pension investments do not perform as anticipated, the bill could be significantly higher. . . .
Some, especially retirees, remain embittered by pension cutbacks. But those who designed and approved the plan praise the city's hard-fought decisions forged in bankruptcy as a financial reckoning years overdue.
I think the early indicators exceeded our expectations," former Detroit emergency manager Kevyn Orr said in an interview late last month.
The paper also talks about the optimism about development, but concerns about "two Detroits," one for the prosperous and the other for the poor.
There are also concerns about income tax collections, which are necessary to operate a vibrant city.