Detroit quickly running out of money

Feb. 27, 2012 at 4:21 PM   |   Comments

DETROIT, Feb. 27 (UPI) -- Detroit could run out of money and be unable to pay its employees by April, barring union concessions and other spending cutbacks, city figures reveal.

Based on cash-flow stats as of Jan. 27, posted on the city's Web site, Detroit had only $76 million on hand last month and would run out of cash in mid-to-late April, The Detroit News reported Monday.

The city has forecast the amount of cash would decline to $55.9 million this month, $42.2 million in March and $2.5 million by early April.

"Things are going down, down, down," said Edward Rago, who had served as city budget director under Mayors Coleman A. Young and Dennis Archer. "All the evidence points to the fact that things are bad, they are getting worse, they are going to be negative in eight weeks or so."

The city had been forecast to take in $97 million in revenue through the end of January but actual revenue fell $21 million short of projections, the News said.

Rago said the budget crunch threatens employees' pay.

"If you don't have any money, what are you going to pay with? I don't think you can issue bonds for payroll," he said.

The News said city officials couldn't be reached for comment on the latest figures.

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