Judge Rules Detroit Bankruptcy Unconstitutional

Lauren Teixeira

Just a day after the city of Detroit filed for bankruptcy, an Ingham County judge has ruled that the city's action violates the Michigan Constitution, which "prohibits actions that will block the pensions of public employees." By some estimates, the bankruptcy will allow the city to renege on the pensions of at least 21,000 city retirees and 9,000 active workers.  Detroit is the largest city in the nation's history to file for municipal bankruptcy. In a statement Thursday explaining the decision, the city's state-appointed emergency manager Kevyn Orr cited the city's declining population, high unemployment rate and nearly $18.5 billion debt. Michigan Governor Rick Snyder (R) called the move the "a last resort" and the only "feasible path" for the city's survival. Detroit, still known by its nickname "Motor City," has declined in tandem with the American auto industry, around which the city was initially built. Journalist Harold Meyerson succinctly summarized Detroit's woes at The American Prospect: As the auto plants closed and the whites fled, Detroit hollowed out. In time, as jobs and services vanished, blacks fled as well. In 1950, the city was home to 2 million people. Today, it is home to 700,000. Its unemployment rate, at 18.6 percent, is the highest of the 50 largest American cities. Its tax revenues, not surprisingly, can’t support adequate city services. But decades of mismanagement helped seal the city's fate. State representative Candace Miller (R-Harris Township) said of the crisis, Detroit has been kicking the can of their fiscal problems down the road for decades and has been hurt desperately by fiscal mismanagement and public corruption. It is now clear that the city has come to the end of the road making the bankruptcy filing the only path forward. 

Lauren Teixeira is a Summer 2013 editorial intern at In These Times.
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