Detroit Expected $55 Million in Property Tax Revenue; It Brought in $6.7 Million

Michigan Capitol Confidential ^ | 9/5/2014 | Tom Gantert

[MichCapCon]

In the fourth quarter of its fiscal year 2014, the city of Detroit projected it would bring in $55 million in property taxes. Instead, it collected just $6.7 million, about $48.3 million short of what it expected.

The city revealed the shortfall in its most recent filing with the Michigan Department of Treasury by Emergency Manager Kevyn Orr.

“It's a combination of many factors,” said Bill Nowling, spokesman for Orr. “Clearly, collections is an issue, but so it is the assessment process itself. In many cases, the city is carrying assessments for properties that are blighted or abandoned and those amounts go into making up that $55 million number.”

That shortfall in property taxes played a big role in why the city was $50.2 million in the red in the fourth quarter, which ran from April to June.

In the third quarter, the city of Detroit fell $19.3 million short of property tax revenue collections. However, in the first two quarters of FY 2014 (July through December of 2013), the city took in a combined $52.1 million more in property taxes than projected.

Robert Inman, a professor of finance, economics and public policy at the University of Pennsylvania's Wharton School, called the recent shortfall "extraordinary."

"While there are surely many possible explanations for the extremely low yield of the property tax recently observed for Detroit, the fact remains that a 10 to 15 percent collection rate for the city's property tax compares to that in many third world cities," Inman said. "And perhaps for third world reasons: abandoned properties, declining values and thus an inability to pay, and finally, simply tax cheating. Detroit has its work cut out for it."

James McTevia, a financial consultant and turnaround specialist, said the revenue projections aren't surprising since they came during a period of insolvency.

"It will be years before Detroit is stable enough for anyone to make realistic projections and so I am not at all surprised the projections are substantially off," McTevia said. "One of the worst things an insolvent company/city can do is base a restructuring plan on poor projections. They will soon be back to court unless someone has a tight hold on the checkbook!"

[MrB]

Or, fence it off and let nature take its course.

[Old Retired Army Guy]

Time for the Lions, Tigers, Pistons and Redwings to move.

[Ditter]

Bush’s fault.

[MrB]

It’s just because white people didn’t care enough about supporting the city.

[Liz]

Detroit---The Hallmark of Democrat Greatness:

How political corruption deepened Detroit's crisis
By Tresa Baldas and Jim Schaefer
3/31/14 DETROIT FREE PRESS

Kwame Fitzpatrick mug shot.

Former Detroit Mayor Kwame Kilpatrick was sentenced to 28 years in prison for running a "money-making racket" out of city hall that steered millions to himself, his family and friends while the impoverished city hobbled along. VPC

His father also went to jail----as a bagman for Kwame.

(In an earlier corruption incident--not related to Kwame's corruption---his mother a Democrat Congressman went to jail).

In March, Kwame Kilpatrick was convicted on 24 of 30 counts of extortion, racketeering, bribery. Prosecutors had argued he deserved stiff sentence because he never thought he did anything wrong

DETROIT — Seven months after the historic conviction of Detroit's former mayor on wide-ranging public corruption charges, Kwame Kilpatrick was sentenced Thursday to 28 years in prison for running what the government called a money-making racket out of City Hall.Kilpatrick had steered millions to himself, family and friends while an impoverished Detroit hobbled along, prosecutors said.

Kilpatrick, 43, was found guilty March 11 on 24 of 30 counts of corruption, including five counts of extortion, racketeering, bribery and several mail, wire and tax fraud charges. On three counts he was found not guilty, and on the remaining three no verdict was reached.

In this case, the overarching issue is that public officials are responsible to the citizenry, Edmunds said. "One thing is certain," she said. "It was the citizens of Detroit who suffered."

Edmunds said Kwame Kilpatrick took bribes, misused nonprofit funds and "used his power as mayor ... to steer an astounding amount of business (said to be some $35 million)" to his friend and co-defendant, Bobby Ferguson, who also was convicted on charges of running a racket out of the mayor's office.

Text messages and witnesses bolstered allegations that Kilpatrick's relationship with Ferguson — whom the government has called the key player in the pair's extortion scheme — was at the heart of the criminal activity. Federal prosecutors are seeking a maximum 28-year prison sentence for Ferguson.

He chose to waste his talents on personal aggrandizement and enrichment. We lost transparency. We lost accountability. Judge Nancy Edmunds, U.S. District Court said she will recommend Kilpatrick be sent to a prison in Texas, where his family lives, and told Kilpatrick that he can appeal. Restitution will be determined later, and a hearing will happen within 90 days.

The judge said Kilpatrick lived the high life, hosting lavish parties, accepting cash tributes and loading the city's payroll with friends and family.

Despite a speech in court Thursday in which the former mayor spoke in a soft voice, asked for a fair sentence and said he accepted responsibility, Edmunds said Kilpatrick largely has shown little remorse. Kilpatrick's defense team had wanted Edmunds to consider Kilpatrick's accomplishments as mayor.

"He chose to waste his talents on personal aggrandizement and enrichment," Edmunds said. "We lost transparency. We lost accountability. ... That way of business is over. We're done."

Detroit's present mayor, David Bing, echoed that sentiment. "I'm glad that this negative chapter in Detroit's history has finally come to an end," he said in a statement. "Today's sentencing sends a strong message to everyone in public office. As we move forward with Detroit's transformation, honesty, transparency, and integrity in city leadership will be paramount."

After the sentencing, U.S. Attorney Barbara McQuade said the judge sent a powerful message: "The people of Detroit will not tolerate this abuse of power."

[Individual Rights in NJ]

That too. Those damned white capitalists in their top hats and 4 horse carriages!

[MrB]

And all the whites left the town to die...

probably because they were intentionally chased out.

[Savage Beast]

The future of America!

[wdk535]

So Detroit’s property tax revenue came up short because nobody paid property taxes on abandoned properties. Imagine that.

[Apparatchik]

That Kilpatrick apparently does not recognize what he did wrong is more an indictment of the entire liberal political machine and the ignorant masses who consistently elect it. It’s no surprise that Detroit cannot collect even a quarter of the taxes it is owed when you have a system where politicians regularly flout the law and favors are done for political allies and supporters as this it the only way they can remain in power. Look at Al Sharpton, Charlie Rangel, Timothy “TurboTax” Geithner - while not all tax cheating politicians are liberals, all the evidence shows that they are the overwhelming majority. Look at Obama’s friend Tony Rezko? His partner in crime Stuart Levine switched from Republican to Democrat and lo and behold, he starts a money-laundering scheme with Rezko. Rod Blagojevich is just another one of legions of Chicago politicians (all Democrats, of course) who have achieved high office through lies, cheating and various dirty tricks so they can tap into the vast amounts of public money for their own gain. And we the people have elected their King - Bronco Bama - as president. Watch your wallets, America - the foxes are in the henhouse!

[Liz]

Nice rant.

[skinkinthegrass]

i enjoyed it..but, i enjoyed, Kill Bill vol. 1, too.

[woodbutcher1963]

“the fact remains that a 10 to 15 percent collection rate for the city’s property tax compares to that in many third world cities,”

Any municipality that only collects 15% or less of the taxes it is owed needs first to fire ALL of its tax collectors.

However, there are many third world countries that do a much better job of running their government than Detroit.

[Texicanus]

What! There are a few Republicans in Detroit that are still working and/or have money left over to pay their taxes and water bills.

This must stop! May I propose that democratic owners of Detroit property pay no taxes - nada deniro. Instead they should receive a subsidy from the surplus in the Detroit coffers for the upkeep and maintenance of their worthless properties. Republican owners, on the other hand, should have their taxes raised until they bleed red to redistribute the wealth and fund the surplus. It’s only fair. /s

This message was bought and approved by the government bureaucrats, tax accountants, and lawyers of Detroit. /S

[Hotlanta Mike]

Using Obama budget projections...fail. Unexpectedly.

[painter]

After the sentencing, U.S. Attorney Barbara McQuade said the judge sent a powerful message: "The people of Detroit will not tolerate this abuse of power."

YES they will,if they keep electing democRATS mayor.

[Don Corleone]

As agent Maxwell Smart was won’t to say,”Missed it by that much.”

[Bellflower]

Very likely this is going on at the White House only with billions instead of millions. The press would never investigate and Congress is impotent and/or in collusion, so what would stop them? When billions are in play with such as the stimulus money who is going to miss who knows how much, but as much as the brazen can possibly get away with. I am sure we would be utterly shocked to know just where our money has gone. New “crisis” keep us looking the other way. Green companies are wonderful laundering devises, as who is going to question anything that is green. They quickly go belly up, bloated with vast amounts of our money, with thin excuses as to where it went. Every time they have a new pet project that calls for billions it is to refresh their pockets. They are stealing us blind and no one is even aware of it.

[Dilbert San Diego]

I’ve heard that many many whites moved out of Detroit after the ‘67,riots. I’ve also heard that many decent black people abandoned the city after the riots also. Detroit has never recovered from the downward spiral.

Sad to say, a bulldozer in much of Detroit would improve things........

[Fido969]

Well, if they just increase the property taxes by 10 times, they’ll have a surplus...