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Declare Bankrupt by ioe18761

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									In Highland Park, the mayor
struggles to change the view

      BY JEFF GERRITT
   FREE PRESS COLUMNIST
        March 4, 2002
Highland Park’s Financial Problems

• Through the high windows of his living room, Linsey Porter can
  see the abandoned house pushing up against his property. In
  Highland Park, even a three-term mayor with the city's most
  valuable home can't hide from trouble.
• Now it's right in Porter's face. He's still The Man and holds the
  title. But the mayor hasn't gotten paid since July 18.
• The state took over Highland Park last June, appointing an
  emergency financial manager, Ramona Henderson Pearson, to
  keep the city solvent. After losing a court battle with the police
  and firefighter union, a weary Henderson Pearson told me she
  plans to ask the state to declare the city bankrupt -- a drastic
  step the state has never taken. Others have talked of merging
  Highland Park with Detroit.
          Reduction of Tax Base
• There aren't as many doctors or lawyers these days. When
  Porter, whose father worked on the Chrysler assembly line, was
  a high school baseball star, Highland Park was a thriving
  community of 45,000 people. There were no boarded up
  businesses or abandoned houses.

• During the 1980s, the city lost nearly 30 percent of its
  population and 10 percent of its jobs, mainly in manufacturing.
  Median household income dropped to less than $10,000 a year.
  In Porter's first term, the Sears store closed and Chrysler Corp.
  bailed, taking a third of the city's operating budget. Today, in
  Highland Park's 2.9 square miles, there are nearly 1,000
  abandoned buildings and vacant lots, and just 16,700 people.
      What the Mayor has Done
• Even Porter's critics give him some props for attracting $300
  million of commercial and residential development, including
  an industrial site at Oakland Park, new housing projects, two
  shopping centers and a $20-million commercial complex.

• Inheriting a city with $13 million in debts, Porter cut the number
  of city employees in half. That made him plenty of enemies in a
  small town, a few of whom even threatened his life. Porter
  refused to take a body guard, but he packed a pistol and
  usually locked his office door.

• In the end, Porter couldn't cut enough, or didn't. The city took
  in $11 million a year and spent at least $12 million -- more than
  half of that on police and fire service.
               The Economics
Revenue = tax rate * tax base                                Initial
                                                             Tax
R=t*b                                                        Base
                               Costs,
                               Revenues

                                          Costs
What happens if the tax base
 dries up?


You must either cut costs or
  raise revenues!                                 Revenues


                                                       Tax Base

								
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