"Missed it by that much."
Posted on 08/27/2014 1:19:59 PM PDT by 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!"
Dat bees a short fall.
"Missed it by that much."
Missed it by.. that much!
“In many cases, the city is carrying assessments for properties that are blighted or abandoned and those amounts go into making up that $55”
And these blighted properties were in tip top shape as recently as last year.
Sounds like Brak O’bama’s employment estimates.
You’ve been too busy on those Ukraine threads.
The people of Detroit should sue the Democrat Party. They caused this, and they have LOTS of money.
“...juuust a bit outside...”
Exceptionally difficult to tax a stone once it has been bled dry.
Jeez, the 10 -15% who actually paid their property tax must feel stupid that they are carrying the rest. Or perhaps that group are those who have a mortgage which is up to date and the mortgage company paid out of escrow?
Hey, let's bail out Detroit again. Those poor citizens lost the property tax money at the 3 casinos downtown. Unaccountable citizens in an unaccountable incorporated city...a socialist utopia. Governor $nyder please give them more of our hard-earned money. /sarc
Is it politically correct to say war zone and bankrupt in the same sentence?
Thanks, Slyfox. That pic represents the root cause of Detroit’s demise. 47 years after the ‘67 riots and we recently bottomed out from the greatest criminal in Michigan history, King Kwame.
UN
FRIKKEN
BELIEVABLE
That’s only 13% of what they expected! How can they survive even for another month if they are that far off in their projections?
Actually the people of Detroit caused this......and they are getting what they deserve.....at least the one’s still there are!!!
And yet the state just keeps pouring money into that dump to try to “save” it.
I predict the same type of secenario for the IRS next year
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