Detroit's municipal bankruptcy has made the world aware of what Michigan already knew. Detroit is broke. No matter how it turns out, bankruptcy is not going to change things very quickly. Detroit will still be broke. That’s going to force the city to get creative. Let’s get one thing out of the way: the state of Michigan is not going to bail out Detroit. And the state of Michigan is not going fully restore revenue sharing from the sales tax with cities such as Detroit. “The state was taking money that was supposed to go to local units of governments and they were using that to fill their own budget holes. And so, we went from revenue sharing to revenue stealing, essentially,” explained Samantha Harkins, Director of State Affairs with the Michigan Municipal League. Detroit experienced a one-two punch to its state revenue sharing payments. First, like all cities, the legislature cut it. Second, part of revenue sharing is based on population and Detroit’s been losing people like crazy.
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