The $160 million would be paid back using the city's utility tax, all of which right now goes for police. The utility tax money would be repaid from income taxes. The trouble is that both of those funds are dwindling. Revenue from the utility tax has dropped by 11% just since 2009. Income tax revenues plunged 21% from 2008-10 and are expected to keep dropping.
Read more at the Detroit Free Press.