Report: Detroit must get budget in order

April 6, 2010 at 5:26 PM

DETROIT, April 6 (UPI) -- Bankruptcy or receivership looms if Detroit Mayor David Bing and the city council don't downsize and slash the city's deficit, a report said.

Without the cuts and changes to downsizing government, the city could end up with a "possible" deficit of between $446 million and $466 million to its $1.6 billion budget, The Detroit News reported Tuesday.

"Detroit city government must be restructured," said the report by the Citizens Research Council of Michigan, a non-profit that has studied Detroit finances for decades. "The new structure must reflect both the reduced tax base and the limited ability of state government to provide shared revenues."

The report recapped what city officials know -- a population drop, high unemployment and other factors adversely affecting Detroit -- the News said. The only way to address these issue is to downsize and make sound budget decisions, the report said.

Report author Bettie Buss, a senior research associate for the Citizens Research Council, said she was tasked with looking at the city's underlying economy and connect it to the budget challenges.

"It is certainly true that the new administration has huge financial and operational challenges ahead," Buss said.

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