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MSNBC TV
updated 7/20/2013 4:16:08 PM ET 2013-07-20T20:16:08

The financial crisis in Detroit has become increasingly complex.

The financial crisis in Detroit has become increasingly complex. The county judge just ordered the city to withdraw its bankruptcy filing saying it is unconstitutional.

Krystal Crittendon, former top lawyer for the city of Detroit and candidate for the 2013 mayoral election, agrees with the judge’s charge. She explains to MSNBC’s Alex Witt that “the path that we are going down with this bankruptcy and this emergency management here in the state of Michigan is not the answer. We need to make some structural changes to the way city government operates.”

In fact, she adds, the implications of bankruptcy will not manifest themselves right away.

Crittendon breaks down the reasons for Detroit’s financial crisis and provides solutions to some of the problems. She attributes many of the problems plaguing her city such as the unemployment rate, abandoned homes, slow emergency response times, and ineffective traffic lights to the people in charge of the services not doing their jobs.

She explains that Detroit suffers from a collection problem. The city does not collect the money it is owed with many of the wealthy people who conduct business with Detroit not paying their fair share of taxes and other obligations. Those in charge must realize that the people responsible for collecting money have been laid off. The city should, in turn, employ people who collect and generate money.

To manage and lead Detroit’s recovery, she says that her city “needs to have a mayor in place who is going to put the people in those key positions who know how to get the money, who know what to do and who know how to make the changes we need to make to make the city a viable and financially solvent city.”

Video: Detroit's financial crisis grows more complicated

  1. Closed captioning of: Detroit's financial crisis grows more complicated

    >>> i'd be happy to listen to any other plan someone can come up with given the restraints we're working under. the reality is with $12 billion in unsecured debt , there's precious little we can do.

    >> that was detroit emergency manager kevyn orr. detroit 's financial crisis has become more complicated with the county judge ordering them to withdraw the the bankruptcy filing saying it violates the state's constitution. the only thing certain at this point is the motor city needs solutions fast. former top lawyer for the city of detroit and candidate for this year's mayoral election.

    >> thanks for having me.

    >> 16.3% unemployment. an hour for emergency services to arrive on average. 40% of the streetlights don't work. how did it get so bad? why did it come to this?

    >> a lot of people who were in charge of making sure we got the services we should get didn't do their jobs. i'm not going to apologize for it and say something else other than what actually happened. but the path we are going down with this bankruptcy and this emergency management here in the state of michigan is not the answer. we need to make structural changes to the way city government operates. we have had a number of people come to the table with ideas and plans. no one has been willing to implement the plans.

    >> crystal, one thing you said is detroit does not have a financial problem. it has a collection problem. can you explain that?

    >> absolutely. and the number we're dealing with is not 12 billion, 16 billion. every time there's a press conference there's another number given with respect to the city's debt. we do not collect money that's owed to the city of detroit . we have a lot of weighty people who do business with the city without paying their fair share in taxes and other obligations or in a owed to the city. we have laid off all the people who are responsible for collecting money. i had one lady tell me the other day she's the only person left in her department and she collected $11 million in 18 months. if we just do the math we realize we need to add people to those departments that generate and collect money for the city.

    >> crystal, you were right there in the middle of all of this. you were the city's top lawyer. do you believe detroit was capable of getting out of this crisis without mr. or, an emergency manager ?

    >> absolutely. i still believe we can. we need to have a mayor in place who is going to put people in the key positions who know how to get the money, who know what to do and who know how to make the change in order to be a viable and solvent city.

    >> pension benefits. opponents say this is the city just trying to get around obligations to pay the pension benefits. what do you think about that?

    >> i think that's absolutely what's happening. there are people who don't believe if you have worked for the city for, say, 25 or 30 years, under the the promise that when you retire you would get health care and pension that you should get it.

    >> yeah.

    >> i happen to believe that you are entitled to it. now, the unions have indicated that they are willing to come to the table and change that model going forward for current and future employees. but what do you do with those people who are in the system now who have these pensions that they were relying on in order to live. i had a gentleman say a month and a half ago, i'm 80 years old, i'm a retired police officer . i retired 30 years ago. they want my pension and health care . they want me to die. that's basically what he would be looking at if we pull these benefits that he was relying upon out from under him.

    >> so, about a quarter million people fled detroit between 2000 and 2010 . this is seen as a one- trick pony town. they have the auto industry . so in order to build it back up, don't you need to entice new business to come in, building permits to be put into place. will bankruptcy slow the ability of people to be able to do that? and, i mean, if it does, what's the incentive for people to come back and invest in detroit ? the only way to revive this town is to diverse any, get people building again.

    >> i agree. there are people moving and relocating their families and businesses to the city every day. we have never, ever taken advantage of the fact of our geographic al position here in this region.

    >> crystal, will people get those things that are expected when you want to invest in the city? will they get new business tax credits, detroit city credits? because this city has declared bankruptcy.

    >> that's a very, very good question. this bankruptcy matter will be tied up in courts probably for many years to come. i doubt very seriously within the next year or two years we will have any finality with respect to what this police station means in the city. i'm agreeing with this judge that the way this was done is unconstitutional. we did reveal the emergency manager laws here in the state that actually brought him to detroit .

    >> crystal, good luck with the election and getting through all of this in your hometown. thank you so much.

    >> thank you.

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