Basic city services are often cut to make up for lost revenue, and this juxtaposition between high taxes and lack of services does not bode well for residents. It creates a vicious cycle that decreases the incentive to live in the city as Detroiters are unable to see a tax-benefit connection between their tax dollars and the benefits they receive. In order for the city to maintain a steady pace of economic growth, it needs to reverse the trend of population loss to grow its tax base and increase its revenue.
Tax rates are a major problem in the city, specifically those levied to support Detroit services and pay off debt. The city must consider fiscal policy reforms that will have a lasting positive impact on all its residents, including policies aimed at lowering the high property tax burden.
Attracting middle class residents, who often act as economic stabilizers, can play an important role in the revival of the city, but Detroit needs to find ways to both attract, as well as maintain, its middle-class population before this can be realized.
We see effective property tax reform as one way to make that happen. Permission to reprint this blog post in whole or in part is hereby granted, provided that the Citizens Research Council of Michigan is properly cited.
Get Involved. Search for:. Stay informed of new research published and other Citizens Research Council news. Constant Contact Use. Please leave this field blank. By submitting this form, you are consenting to receive marketing emails from:. Emails are serviced by Constant Contact. August 19, Latest Research Posts. Compounding the problem was the largess of government.
Prior to bankruptcy, there were 18 city workers per 1, residents compared to a national average in big cities of five to 10 per 1, workers. We refused to let Detroit go bankrupt. We bet on American workers, and American ingenuity, and three years later, that bet is paying off in a big way. Looking at increased welfare bases and similar situations in many other cities and states across America, I suspect there are more bankruptcies to follow. Are you listening, California?
John Tommasi is a senior lecturer in economics at Bentley University. Demographics also played a role. Why has Detroit continued to decline and at a faster rate in the nearly four decades since? Was there some rule saying that, because of those previous events, Detroit had to keep declining? Or are new causes to blame?
These questions are worth asking, because other Midwestern cities with similar legacies to Detroit have outperformed the city during this period. Chicago, Milwaukee, Cincinnati and Philadelphia began their upticks in Even the Rust Belt cities that continue declining — like Pittsburgh, St. This would likely surprise some people, whose image of Detroit is as this declining urban prairie of a city, that sits in a declining state, in a cold, stagnant, post-industrial Midwest region.
None of those notions are true, either. The southeast Michigan region does quite well — for example, less than an hour west of Detroit is Ann Arbor, a bustling city with an eds-and-meds economy. Six of the ten largest cities in greater Detroit have grown in population since In fact, there is significant wealth throughout the metro, and much of it butts up right outside the city border. Such facts should at least tweak the narrative alluded to above.
Detroit has become an outlier, suggesting that its problems are unique and internal. A combo of urban renewal, subsidized highways and discriminatory loan policies drove white people to the suburbs, and kept black people inside the core. This segregationist pattern, said Mogk, continues, and may not organically reverse itself. Most middle and upper-income families will not locate in low-income neighborhoods.
The presence of both of these factors in many of the city's neighborhoods, and public services that were not competitive with most suburbs, largely explain why the white middle class and some members of the African-American middle class did not choose to live in Detroit. As for infrastructure, Mogk says the leftover housing and factories have made it difficult for Detroit to develop economically.
Old blighted buildings are expensive to repair, and their removal has been a slow process. This means that prospective Detroit businesses can't assemble large pieces of land.
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