An ulterior motive for looking at the future of Detroit.
The city has gone from a population of 1.8 million in 1950 to 700,000 today, and in addition to the problem of pensions that may not be paid, an infrastructure that is so severely damaged, that even the most optimistic backers know it will never be repaired in this lifetime.
While for most people, this problem is far away, and not likely to directly have an affect on them personally,
maybe not...
The question is, "What does this have to do with me?" Except for future tax increases, maybe nothing, except a decline in services. On the other hand, if you plan to move, your choice of places to settle could have an effect on your later years... especially if you are looking forward to 10, 20 or more years of retirement.
We live in a Central Illinois small town, which is surrounded by many small communities, and much farmland. In some ways, we are seeing signs of a mini-Detroit... with older homes, a shrinking population, and tax base. So far, signs of deterioration of quality of life, is limited to the consolidation of school districts, larger class sizes, bussing where a three minute walk was once the norm, and a shifting of Police and Fire protection from local to county. Small businesses are rapidly closing, and main streets becoming empty shop windows.
So, don't choose a small town. But... it's happening on a wider scale... not just in small towns, but in larger municipalities, and where most people don't even realize that their future is being compromised.
One way to check on the financial status of the town is to look at the Municipal Bond Rating... (google - Moodys Municipal Bond Rating Yourtown NY), this should give an indication of the borrowing power that might be needed to keep the services intact. In addition, knowing the state of the cash reserves, is a good indicator of stability.
Cash reserves are necessary to fund the City’s day to day operations as well as fund capital improvements, and help ensure that the City can keep operating in case of an emergency. Under current economic conditions, these reserves are particularly important in case revenues for the City decline. In addition, many operations of the City, particularly within the water, sewer and electric utilities, require significant cash reserves because equipment operated and maintained by the City, which is crucial to maintaining each utility, can cost hundreds of thousands of dollars to replace.
I doesn't take very long for a financially strapped municipality to begin having problems. Even with an A+ credit rating, the loss of services and the effect on infrastructure is becoming apparent in many cities. A reduction of force in Police Departments, a shift from paid to volunteer Fire Departments, closing of public pools, and larger class sizes is becoming common.
Even in my own town, which is financially stable, the problems of an aging infrastructure (sewers) is becoming very costly, and the unforeseen shutdown of a county incinerator has left a larger than expected debt burden.
A long expected referendum on a new school, just narrowly passed... where only a year ago, it was an accepted and foregone conclusion. Our local mall has lost 25% of the smaller stores in just the past 3 years.
True... not Detroit. The streetlights still work, the roads get repaired and the Police, Fire and Ambulance services are in minutes, not hours. Pensions, while not well funded, can be repaired, and the schools still have gym, music and sports teams. Trash pick up is good, if a little more expensive, and fall leaf pick up is still offered. Our local parks are still maintained and downtown is still attractive even with many empty stores. As of now we're doing well.
Not meant as a downer, but as a reality check... and for anyone looking towards a future move, or looking at a multi year timeline, not a bad idea to check out the municipal finances... not just for possible tax increases, but more importantly, for the quality of life in the years to come.