Tagged: Detroit financial crisis

Detroit city officials are sending some mixed signals when it comes to the city’s crumbling finances.

On the one hand, officials said Tuesday that the city won’t run out of cash this month. They had previously said that would happen without state help, in the form of releasing at least $30 million in Detroit bond money the state is withholding.

On the other hand, Deputy Mayor Kirk Lewis says the city faces an even bigger than expected cash shortfall by the middle of next year.

In Moody's world, you can be triple A when you're at your best, or C when you're at your worst.

Detroit is dropping further into the Moody's bond rating basement with the recent worry over the city's financial position. The city might not be able to make a December payroll if they don't meet a state-set benchmark.

The Bloomberg Businessweek headline is "Detroit Bonds Cut Deeper Into Junk as Cash Crunch Nears":

Detroit had its bond ratings cut deeper into noninvestment-grade territory by Moody’s Investors Service, citing a cash crisis that may mean bankruptcy or default in the next 12 to 24 months.

“These downgrades reflect the city’s ongoing precariously narrow cash position and a weakened state oversight framework,” Moody’s analysts Genevieve Nolan and Henrietta Chang said in a statement from the New York-based credit-scoring company. The downgrades affect $8.2 billion in Detroit debt, according to David Jacobson, a Moody's spokesman.

The city's Moody's credit rating went from B3 to Caa1.

Detroit deadlock continues

Detroit needs cash if it's going to make payroll in December. $30 million waits from the state.

But Mayor Bing and the Detroit City Council are locked in a battle over a law firm contract. A special council meeting was supposed to be held yesterday to resolve the problem, but the the city's legal department canceled the meeting.

Even it the meeting had been held, Matt Helms of the Detroit Free Press reports, Bing would not have had the votes to end the deadlock.

Had a vote been taken, it likely would not have gone Bing's way. The sole council member to vote to approve it, President Pro Tem Gary Brown, said Monday that the Bing administration "doesn't have the votes" to reverse course.

And the city's financial crisis looms.

Legislature aims to cut a source of revenue for some cities

There have been a lot of proposals floated in this lame-duck session of the Michigan legislature, but one plan the Gov. hopes to pass by the end of the year is a phase out of the "personal property tax."

That's a tax that many manufacturers pay to local governments on equipment they own. Local governments that have a big manufacturing base have said eliminating the tax would hurt their bottom line.

MLive's Dave Eggert reports Lt. Gov. Brian Calley plans to unveil a new plan to cut the tax today:

Sources who have been briefed on the proposal said key changes include partially replacing the revenue with a portion of the state's tax on out-of-state retail transactions and allowing local governments to assess a special tax to recoup money for police, fire and ambulance services.

Troy breaks ground on new transit center

The city of Troy is breaking ground on a new transit center today. The project was opposed by Troy's recently recalled Mayor, Janice Daniels, because the funding for the project is comging from the federal government. The transit center will cost $6.3 million to build and will house facilities for bus, train, and car rental services. The transit center will replace Birmingham's Amtrak stop. It's expected to open the summer of 2013.

Michigan's longest serving first lady, Helen Milliken, dies at 89

Helen Milliken was Michigan’s first lady for 14 years, from 1969 to 1983.

The Detroit Free Press writes of a Republican who fought for causes that sometimes were at odds with the party:

Helen Milliken is perhaps best remembered as Michigan’s leading proponent of the Equal Rights Amendment to the U.S. Constitution. The ERA, which would have banned discrimination based on sex and authorized Congress to adopt laws enforcing it, came close to passage (it was approved by Congress and 35 of the needed 38 states, including Michigan).

But she was also a leading advocate for the arts and environment, becoming a political force in her own right.

Missing today's due date, Michigan gets a health care exchange extension

Michigan Republicans don't care for it.

And they've been hoping that provisions of the Affordable Care Act would get struck down. That hasn't happened, and one deadline for action is today.

But as MLive's David Eggert reports, they've been given an extension to decide on whether to set up a state run health care exchange:

The Obama administration late Thursday gave Michigan another month to decide if it wants to build its own online marketplace where individuals and businesses can shop for health insurance.

The deadline had been set for today. But in a bow to a request from the Republican Governors Association, U.S. Health and Human Services Secretary Kathleen Sebelius extended the deadline until Dec. 14.

Detroit Mayor reaches deal to keep city afloat

The dire financial projections for Detroit continue, with some predicting the city could run out of cash in December.

But Michigan Radio's Sarah Hulett reports, Mayor Bing has reached a deal with the state worth $137 million:

Mayor Bing says the agreement will help the city make changes it needs, and avoid running out of cash as early as next month.

"We're asking for $10 million in the month of November. We meet the milestones we've agreed upon, we're asking for $20 million in December, and then we've got another $50 million that will be held in escrow at a later date," Bing said.