Michigan taxpayers have been overcharged by the state of Michigan to the tune of $350 million. That is what Michigan’s budget surplus really is, the state taxed its citizens an extra $350 million that they had no plan to spend. So, rather than sending the money back to the taxpayers, spending the money to fix our literally crumbling roads or simply hang on to the money for a rainy day, what does our nerd Governor propose?
Gov. Rick Snyder said Thursday he’s open to using one-time surplus tax dollars for the state’s contribution toward a fund to bolster Detroit pensions and settle the city’s bankruptcy.
Snyder has pledged $350 million over 20 years toward a $816 million fund designed to limit cuts to pensions and shield city-bought art at the Detroit Institute of Arts from being sold to satisfy creditors.
While private sector citizens in Michigan have had to go round after round of belt-tightening (job losses, furloughs, pay cuts) during the reign of economic terror during the Granholm era. Now we have to punch additional holes in our belts for even more belt-tightening during the ongoing Obama disaster. Why should Michigan taxpayers take it in the shorts, again, protecting city worker pensions? Let them tighten their belts, or sell the DIA art and other city assets like other bankruptcies require. Get expertise available via Arizona Bankruptcy and Debt Solutions
BTW, you know after Snyder uses our tax ‘surplus’ protecting city pensions, he will come hat in hand looking for additional ‘revenues’ (i.e. taxes) to fix our roads.
Davis et al v. Detroit Downtown Development Authority et al;
U.S Eastern District of Michigan Case Number: 2:17-cv-11742
Eastern District of Michigan U.S. District Judge Mark A. Goldsmith ruled on June 19th that Detroit’s Downtown Development Authority can issue $34.5 million in bonds to pay for the relocation of the Detroit Pistons basketball team to the new Little Caesar’s Arena. The Judge’s ruling rejected arguments that the eventual use of school tax money to repay these tax increment finance bonds violates Detroit residents’ constitutional and statutory right to vote on a school tax money diversions.
One complication here is that the tax monies being diverted are not those of the current Detroit Community Public School District, but rather those of the legacy Detroit Public School District which was reduced to zombie status last year in the DPS bailout. Is the old DPS really a school district today, or just a financial entity? The Detroit Community Public School District is a near bankrupt ward of the State of Michigan that won’t receive any Detroit property tax revenues until the legacy DPS district debts are paid off. No one alive today will live to see that.
And no. I don’t mean that thing where we exercise out "right" to set off large quantities of fireworks next month.
Last weekend, I spent some time with some friends who now live out of town.
We did the “usual touristy” things like Greektown and the Casinos.
They wanted me to go with them to the Grand Prix, but I’m more of a NASCAR Guy than IndyCar.
Afterwards, I insisted on changing things up and that we go down to Lafayette to eat.
I told them that it was part of the “Authentic Detroit” dining experience and that sort of thing.
They had never been down there and after initially scarring the hell out of them (along with equally confusing them with how the food was ordered/delivered), they settled down a bit and we started to catch up on things. They began to comment on local stuff, basically regurgitating what people like Gov. Snyder, et al, were shoveling to the rest of the country about how things have turned around since the bankruptcy.
I laughed at their comments and replied to the effect that, “Yeah! They wish!”
“Look at all of this new stuff downtown? How can you argue that things aren’t better?”, they replied.
I told them that “Yes”, the Downtown Area has improved. Large amounts of government money tends to eventually do that. “Yes” places like the Riverfront have gotten nicer.
But then I added, the same cannot be said for the rest of the city.
They didn’t believe me.
They couldn’t accept the fact that everything was as bad as I told them it was.
I told them, “Fine, want to go on a little trip?”
They were a little apprehensious to say the least, but we loaded up into their car and we went happy motoring…away from the freeways.
We went up and down places like Jefferson, and then Warren and Mack where it didn’t take that long to notice the large swaths of bombed out/burned out neighborhoods (at least I think they were neighborhoods at one time), large piles of trash and abandoned/stolen vehicles (along with boats…yes boats) strewn about, pretty much every other building covered with graffiti, I told my now visibly scared “driver” that I wanted to stop at the next party store because I wanted to get something to drink.
Yes, I did that on purpose.
So, while we parked across the street and started walking towards the party store, I got bombarded with a ton of questions (besides is this really safe) like why that particular store had a chain-link fence around the roof topped with razor wire, why there were thick metal plate doors next to the entrance and why was there a flashing green light on the sign outside of the building. When we went inside, they did a double-take at the walkway surrounding most of the perimeter of the inside of the building separated by 1-inch thick Lexan.
I casually grabbed a 2-liter of Rock N’ Rye, they didn’t get anything (I cannot imagine why) and we went back to their car. I still had more to show them.
Continuing our “tour”, they still couldn’t get over the flashing strobe light on the sign.
A Bankruptcy Postponed Is Not A Bankruptcy Avoided
The $ 617 million PA 192 – 197 bail out package signed by Governor Snyder on 21 June (plus the $ 48.7 million emergency down payment earlier this year) will not fix the Detroit Public Schools. The culture of corruption and incompetence long fostered within DPS suggests that the new DPS – same as the old DPS, except for some liabilities – will fail miserably a few years hence in an avalanche of new liabilities. Michigan will then be left to sort out two separate DPS entities with unsustainable liabilities. This could easily occur even before Governor Snyder leaves office in 2019. Karma. Déjà vu all over again.
There is scant precedence for school districts filing for bankruptcy, the Snyder administration found. In 1990, according to an administration letter to state Rep. Laura Cox, R-Livonia, the Richmond Unified School District in Northern California filed for bankruptcy because of $42.5 million in debt. The judge ruled the district could not be protected by the court in bankruptcy and ordered the state to provide the district with operating funds.
The ball is now in the Governor’s court, so to speak. The report is not public yet, but the press release is out. It only took the State independent review team 18 calendar days to figure out what everyone knows: Wayne County is in a ‘Financial Emergency’. Here is the money shot from the Michigan Department of Treasury press release:
The team’s extensive report indicates that numerous conditions led to the determination that a financial emergency exists in the county. Those conditions include the following:
The county’s last four annual financial audits revealed notable variances between General Fund revenues and expenditures as initially budgeted, as amended, and as actually realized. In addition, County officials underestimated actual expenditures in three of the fiscal years by amounts ranging from $16.7 million to $23.7 million.
County officials engaged in unbudgeted expenditures in violation of Public Act 2 of 1968, the Uniform Budgeting and Accounting Act.
Although there was agreement among county officials that existing detention facilities are inadequate, there is no consensus about whether to complete construction on a new jail or to renovate existing facilities.
According to the county executive’s recovery plan, unfunded healthcare-related liabilities were estimated to be $1.3 billion as of the last actuarial valuation with funding set aside for this purpose of less than one percent of liabilities. Healthcare-related liabilities represent 40 percent of the county’s long-term financial obligations.
The Governor now has 10 days to take one of five actions: do nothing, conduct another ‘neutral’ evaluation, arrange a consent agreement, impose an emergency manager, or file the County for Chapter 9 bankruptcy in U.S. Bankruptcy Court.
$47 billion for 2012, and now asking $53 billion…and an estimated $2 billion more each year in tax increases proposed in Prop 1…Just where is all this money going???…Let’s follow some (most) of it…I have…
Below you will find just a few examples of how Michigan Taxpayers are on the hook for a hell of a lot more than this “Grand Crap Sandwich Bargain” of $195 Million of your tax dollars! If this isn’t leaving a bad taste in your wallet just wait, now that this is done they are working real hard for you up in Lansing to pass legislation as to raise your Gas Taxes too.
While Detroit Goes Bankrupt, Michigan Taxpayers Hand Disney’s ‘OZ’ Nearly $40 Million in Film Credits and this is but one example there are numerous other Film Subsidies that have and will be handed out to Obama’s Hollywood supporters!
The hard part to swallow is our legislators all think it’s funny that they are spending our tax dollars on this wasteful venture that corrupt politicians created in the first place. They won’t be out done they will all laugh when they pass yet more tax increases on we Taxpaying Citizens of Michigan.