Governments Going Broke

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The city of Highland Park, Michigan is surrounded on most sides by Detroit, and a small patch of the city touches the border of Hamtramck. This is the place where Henry Ford’s Highland Park Ford Plant was built in 1909, and Chrysler made its home there until it moved its world headquarters to Oakland County almost twenty years ago. An article from last week on Yahoo describes Highland Park:

In its heyday, Highland Park was one of Michigan’s urban jewels, with large yards, spacious homes and tree-lined streets.

Henry Ford put his first moving assembly line here, and his factory eventually churned out a car every minute. By 1930, the city had grown to 50,000 people.

…In 1980, the census counted 27,000 people living in Highland Park. By 2010, that number had fallen to 11,776.

The median household income is $18,700, compared with $48,700 statewide. And 42 percent of the city’s residents live in poverty.

Back in August, DTE Energy Co. and city bureaucrats came up with a radical solution for the city’s $4M in outstanding bills for electrical service that goes back almost ten years. Unable to pay, DTE didn’t just shut off the lights – the company sent out teams in trucks to remove two-thirds of the city’s light poles. Most of the city is dark, and the electric bills going forward have been reduced by 80%. DTE, according to the story, has written off the amount as uncollectible.

Whenever you read these stories about cities going broke, the one common theme mentioned within the media stories is that these cities have a “dying tax base,” meaning there are fewer slaves available to fund the government’s rotten shenanigans. The “dying tax base” is comprised of those folks and businesses (like Chrysler) who are no longer willing to be victims of the local government’s theft, political tomfoolery, rampant financial fraud, and self-serving bureaucratic schemes.

Highland Park, until 2007, had spent about seven years under the control of an emergency financial manager appointed by Michigan Governor John Engler. And now, it looks like the city’s school district will come under the power of an “emergency financial manager” because the school district is embroiled in audit issues and budget deficits. A sign of the times.

9:07 pm on November 6, 2011