Detroit facing fresh fiscal woes with coronavirus closures

DETROIT (AP) — Barely surviving the 2008 economic meltdown and humbled by its 2013 bankruptcy, Detroit’s fiscal future now faces another daunting foe in the coronavirus.

The state-forced shutdown of its three casinos, auto plants and other businesses to slow the spread of the COVID-19 virus is projected to cost Detroit $348 million over the next year and a half.

Mayor Mike Duggan warned that Detroit could see a return to state oversight if action is not taken quickly, as he announced some layoffs, pay cuts and a reduction in services.

“We don't get to just solve one problem at a time,” Duggan said Tuesday in a televised address. “Because while we have a health crisis, we have the biggest budget crisis this city's seen in seven years and we have to solve it at the same time.”

Michigan has at least 27,000 confirmed cases of COVID-19 and 1,768 deaths — third-most in the U.S — and its largest city has been especially hard hit. While the state remains under a stay-at-home order from the governor, the virus has sickened at least 7,020 people in Detroit and killed at least 424. For most people, the virus cases mild or moderate symptoms, but it can cause more severe illness and death in some, especially older adults and people with existing health problems.

With people out of work and non-essential businesses shuttered, the city faces financial losses from income and sales taxes and fees. Detroit also expects to lose about $184 million in casino wagering taxes.

The city will make up 80% of the shortfall through budget surpluses, money in a rainy-day fund, blight removal funds and cutbacks to capital projects. That would leave a $44 million deficit to be made up mostly through layoffs and pay cuts.

A budget deficit could mean the city again finds itself under...