Emergency Manager Kevyn Orr says the city of Detroit’s cash-flow crisis makes it “insolvent” and unable to borrow more money to mask over debts being made worse by skipping millions in payments for retiree pensions and health care.
The report hints that city employees who were not hit by last year’s wage reductions could face pay cuts in the near future and that Wall Street bondholders will be asked to take a haircut to relieve a city that shelled out $133 million in debt payments last year on a $1.23 billion budget.
The emergency manager’s spokesman put the city’s predicament in more blunt terms. “We’re going to be out of money by the end of the year,” Nowling said Sunday. “If all we did was collect taxes and pay our debt, we couldn’t pay it off in 20 years. That’s the situation that we’re in now.”
From The Detroit News