DETROIT (WWJ) – “Is your city next? Lessons from Detroit’s fight to survive.” That’s the headline on the cover of the next issue of Time magazine, which highlights the city’s bankruptcy.
Assistant Managing Editor Bill Saporito says Detroit is not alone — but simply the first and worst in terms of what’s happened to its finances and its ability to deliver services.
He said there’s concern that this is going to happen in other cities across the country.
“And in New York City of course which is the financial capital, there’s concern about municipal bonds in the future,” Saporito said, in a live interview Thursday on WWJ Newsradio 950.
“One of the issues in Detroit is some bond holders may not get paid, and they are generally first in line to get paid and are sure of getting paid. If that does not happen, then it can change finances for a lot of municipal bond issuers, and that’s a big worry across the country,” he said.
The Time article begins like this: “The lights have gone out in detroit, literally. Forty percent of the streetlights don’t work, since there isn’t enough money to keep them on, or up, in a city that some 60 years ago was the richest in the country and perhaps the world. But that was another time…”
Saporito said they’ve been following Detroit’s financial struggle for quite a while. The magazine even bought a house in the city and staffed it for a year.
“What we’re seeing in Detroit is that it’s not alone; it’s simply the first and worst in terms of what’s happened to its finances and its ability to deliver services,” Saporito said. “So it’s a problem that other cities across the country share with Detroit and the article really talks about that aspect of it, too.”
In approving Detroit’s Chapter 9 filing last week, Michigan Gov. Rick Snyder said there was simply not other viable option for the city smothered under an estimated $18 million in long-term debt.
Time magazine comes out on Friday.