The deterioration in Detroit finances has been long coming and pervasive.Like lava flowing down the mountain the debt was pouring out and disintegrating everything in its path. It was so obvious. How obvious? Detroit issued Pension Obligation bonds in 2006 totaling $2 billion dollars in a futile attempt to get more liquid and kick the can down the road. Wise people took that action as a big "red flag" and left the city, thus avoiding a big part of the tax crunch.That, in turn, caused a further collapse in home prices. Well the tax crunch has started in Providence and the smart ones will start moving now. There is really no way Providence can survive without raising taxes dramatically.
I am team leader in my Graduate School Course at Stanford University Business School.The course subject matter is
By Joshua Rauh, Stanford Graduate School of Business
Our teams focus was on the City of Providence and its finances over the last 4 years before Taveras and his Category 5 Hurricane proclamation and when Cicilline lied his way into Congress. Then 2 years later Taveras administration sought " way to little ,too late" reforms through resolutions, renegotiation of contracts and ordinances. This will give him a few months of political breathing room, as he now attempts his escape from the sinking ship called "Providence". With Detroit in the headlines once again this will cause a review of the cities and towns and their precarious financial conditions across the State of Rhode Island. let me save you the suspense.It is an unadulterated mess.
Our findings on Providence are alarming and at some point we will release a final version of that report. For now, are undergoing peer review of our project at Stanford and we are reviewing other projects.This course was outstanding.
On Thursday December 5 th there will be a webinar and a special guest speaker , Mark Dingley
Deputy Treasurer for the State of Rhode Island. The public is welcome to join in and the link is below. Or you could just stick your head in the sand like most Rhode Islanders