Yesterday, the Detroit Free Press released the findings of its months-long investigation into the Detroit bankruptcy.

As writers Nathan Bomey and John Gallagher state, “the answers may surprise you.”

The pair conducted an in-depth analysis of Detroit’s recent history, delving into financial records and examining the political decisions of city leaders since 1950. City audits, pension fund reports, public documents and dozens of interviews with experts and leaders form the last six mayoral administrations contributed to their findings.

Bomey and Gallagher conclude that decades of fiscal mismanagement and irresponsible decision-making have culminated in Detroit’s current state of fiscal disaster. City officials are responsible for the downfall of Detroit, as they suggest in the report: “…there were ample opportunities when decisive action by city leaders might have fended off bankruptcy.”

Major takeaways from the report include the following bits of information:

  • Detroit subsisted on a habit of borrowing billions of dollars without cutting expenses.
  • In addition to their salaries and benefits, municipal workers and retirees collected generous bonuses for years—in fact, $1 billion worth from 1985 to 2008.
  • City leaders maintained generous health benefits for public employees knowing that the legacy costs would drown the city in debt down the road.
  • City leaders repeated raised taxes as a stopgap solution to deeply-embedded fiscal problems.
  • These out-of-control legacy costs are now exacting their toll—from 2000 to 2012, retiree healthcare costs soared 46% while revenues fell by 20%.
  • Michigan state politicians reduced Detroit’s state-shared revenue by 48% from 1998 to 2012.
  • Debt exploded substantially in the 2000s.




The incredibly thorough report includes a number of informative graphs and data tables that paint a grim, but eincredly clear picture of the nation’s largest city to declare bankruptcy. PublicCEO readers should not miss the full article at the Detroit Free Press.