After Detroit, another city ponders bankruptcy

Published on NewsOK Modified: July 8, 2014 at 3:03 pm •  Published: July 8, 2014
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FLINT, Mich. (AP) — As Detroit struggles to climb out of bankruptcy, another Michigan city with strong ties to the auto industry may be about to fall into the same hole.

Flint, the birthplace of General Motors that once had 200,000 residents, has also endured a spectacular drop in population and factory jobs and a corresponding rise in property abandonment, much like its insolvent big brother an hour's drive south.

If a judge rules against Flint's effort to cut its retiree health care benefits, the city is expected to join about a dozen cities or counties that have sought help from the courts since the start of the recession.

"If we don't get any relief in the courts ... we are headed over the same cliff as Detroit," said Darnell Earley, the emergency manager appointed by Gov. Rick Snyder to manage Flint's finances. "We can't even sustain the budget we have if we have to put more money into health care" for city workers.

Before Detroit, the largest local government bankruptcy filing was in Jefferson County, Alabama, in November 2011. The county emerged last year after reorganization of its $4 billion in debt. Court proceedings continue for the California cities of Stockton, San Bernardino, and Mammoth Lakes, all of which filed in 2012.

The greatest threat of new cases may be in Michigan, where about a dozen cities and four school districts are under state control. The state unemployment rate still is 7.3 percent, and some entities remain saddled with underfunded pension plans.

That Flint might follow Detroit, which filed in July 2013, isn't surprising, given their shared circumstances. Both were once boomtowns brimming with auto jobs for collars white and blue. General Motors employed about 80,000 in the area in the early 1970s. Fewer than 8,000 GM jobs remain. The city's population has fallen to just below 100,000.

The community is probably best known by many as the hometown of filmmaker Michael Moore, whose 1989 documentary "Roger and Me" chronicled in first-person, court-jester fashion the automaker's retrenchment and the effect on the city.

Today the city is a mixed picture of hope and desolation. Downtown bustles with people going to government offices, the growing University of Michigan branch campus and businesses along red-brick paved Saginaw Street, which features several striking iron arches that span the roadway and are replicas of those from a century ago.

But on the edge of the business district, overgrown lots and boarded-up buildings creep in, and empty houses outnumber occupied ones in some residential areas.

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