IS SEGREGATION OF MINORITIES AND POOR PEOPLE IMPACTING MUNICIPALITIES?

One of the great unknowns, or maybe not so unknown, is the fate of small and medium municipalities now that the 'sequester' is in place.

Already rumblings are issuing from Detroit, particularly hard hit by the recession and on the brink of bankruptcy.  

But some municipalities are starting to highlight what is an unspoken truth in America: the segregation of black and poor minorities in small municipalities that now, without the aid of the federal funds, are finding themselves in even greater distress than before.

This segregation, in fact, creates distress because the community cannot support the municipality, and without government funds, the municipality cannot support the community.

Declining tax revenues and pension loads are cited as some of the 'burdens' on the munis' budget. Mismanagement in others.

What is also happening is that a state receiver, who is called in to assess the fiscal problems is appointed who will then suggest a plan that affects the local communities in a way that leaves them without a voice.  

A receiver in Harrisburg, Pennsylvania, has said that he was disturbed by what he heard from elected officials and residents that blamed the cities' crises on 'those people', the black and poor minorities.  

What the receiver suggested was to include these minorities in the decision making process, and to develop an economic strategy of inclusion for blacks and latinos.  

The American way of life is  creating a de facto system of separation for the less fortunate, which distances them every day more from the opportunities they need to better their lives.  They in fact, have the worst schools, the worst public services, and substandard opportunities.

In Harrisonburg, white people make up only 30% of the population.  Another 32% of the population lives in poverty.  And the city is hamstrung in changing direction because they cannot collect taxes on the 30% of the population that is indigent, and so the blame game continues.  

In Detroit, almost half of the real estate property are indebted to the city for property taxes.  Detroit now has almost 700,000 people, 83% of whom are black, and of which 36% live in poverty.  

Detroit, in the meantime, is close to collapse, with a 14 billion dollar obligation burden to respect.  If it fails, it would be the largest ever recorded failure of a city in US history.

Source: Bloomberg 3.18.13