Auto woes add to city's budget problems December 30, 2005 BY MARISOL BELLO FREE PRESS STAFF WRITER

City Budget Problems Labor force has declined from 633,000 in 1980 to 385,476 in the summer of last year. That’s a 39% decrease in Detroit’s labor force. Less people living in Detroit means less property taxes collected by the city government, which is usually the largest asset to a city government. The city loses on average 10,000 to 12,000 people per year. Unemployment remains high for the city. It currently is almost 15%. More and more jobs are vacating the city, lowering income tax revenue also. From 2002 to 2004, Detroit experienced a fall of 10% in income tax revenue. Detroit’s budget deficit could exceed $100 million by June 30.

Yikes! As the city government struggles, so do the Detroit Public Schools, enticing more young families to leave Detroit. As the 11 th largest city in the nation with a population of about 900,000, Detroit is also the nation’s poorest big city. One in three residents live under the federal poverty level (which is $19,157 in income a year for a family of four).

Detroit’s Labor Market W/P Labor (W/P) 0 L0L0 S0S0 D0D0 S1S1 D1D1 (W/P) 1 L1L1 Shrinking labor force and even less jobs!

Detroit’s Spending Imbalance G Income GDGD GSGS Y0Y0 Y1Y1 Gov’t Deficit G0G0