A committee led by Michigan Treasurer Andy Dillon released a report on Detroit's finances earlier in February. It showed that Michigan's largest city has been in fiscal hot water for several years. On looking at the review, Michigan Gov. Rick Snyder said that he concurs that Detroit is in trouble and will appoint an emergency manager to balance the city's budget, says the Detroit Free Press.
Detroit Budget History
Detroit has been operating in deficit for some time. Over the last 18 months, the city and state have been working to find solutions. In April 2012, the state entered into a consent agreement with Detroit. The treasurer's report found that Detroit is currently $327 million in debt, including retiree pensions and healthcare benefits, and owes $14 billion in long-term debt. The Detroit News reports that Dillon said that city officials were borrowing to cover the deficit and treating loans as revenue. Had they not borrowed, the deficit was projected to reach $937 million in fiscal year 2012. The review team's recommendation was to appoint an emergency manager for Detroit, and Gov. Snyder had 30 days to make the final call.
Gov. Snyder Calls for Emergency Manager
On March 1, Gov. Snyder made the call and announced that Detroit would be getting an emergency manager. The Detroit Free Press says the governor called it a move toward a "bright and shiny new future" for the city. Though he has a candidate in mind, Snyder would not give a name. The emergency manager will basically be in charge of Detroit. He or she can make any cuts in services or funding, sell assets, hire and fire, and break contracts.
Detroit City Officials' Response
According to the Associated Press, Detroit Mayor Dave Bing said he would review the city's options and weigh the impact of Snyder's declaration of financial emergency. Bing said the city would work with the emergency manager so long as the appointment of one stabilizes the city fiscally and improves life for Detroiters. The city has 10 days to file an appeal, and a hearing is scheduled March 12.
Michigan's Turbulent Emergency Manager Law
The question of emergency management has been long debated. Voters repealed the emergency manager law, but Michigan's congress reinstated it in December. When asked how he thought an emergency manager would impact Detroit, Pastor D. Alexander Bullock, executive director of Rainbow PUSH Detroit, said, "It remains to be seen in the long run how this will affect Detroiters, but in the short term, it is demoralizing. We, as a state, voted to repeal Public Act 4, and then in the lame duck session, the legislature passed a new emergency manager bill."
A native of Michigan, Marilisa Sachteleben writes about issues in her state's most pivotal city of Detroit.
- Politics & Government
- State Budget & Tax
- Rick Snyder