Source: CNN Money
Detroit is struggling under at least $15 billion in debt, due to years of borrowing to pay its bills as tax revenues plummeted. The population of the city has fallen by nearly 30% since 2012, and there are currently over 100,000 vacant lots and buildings. Together, this has meant a drastic drop in revenue from both income and property taxes.
"No one should underestimate the severity of the financial crisis," Orr said in a statement. "The path Detroit has followed for more than 40 years is unsustainable and only a complete restructuring of the city's finances and operations will allow Detroit to regain its footing."
Detroit is struggling to come up with annual debt payments of about $246 million, which eat up almost 20% of the its general fund budget. Orr says the city needs relief from the money it owes, suggesting that investors holding its debt could end up taking haircuts.
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