Rick Snyder, Michigan Gov., Declares Detroit Financial Emergency Exists

Michigan Governor Declares State Of 'Financial Emergency' In Detroit

Detroit is in a state of financial emergency, Michigan Gov. Rick Snyder (R) said Friday.

"There's probably no city that's more financially challenged in the entire United States," said Snyder. "We need to start moving upward with the city of Detroit."

Mayor Dave Bing has a 10-day period in which he can request a hearing, after which point, according to the Associated Press, Snyder can appoint an emergency financial manager for the city or revoke his decision.

Snyder said Friday he had several names in mind for the position. He describes his top choice as someone with a strong professional resume who is, he said, "a people person." He did not name the individual.

His statement at Friday's forum holds up a state review team's findings of a severe financial emergency in the city, pointing to more than $14 billion in long-term liabilities, including underfunded pensions. The city is also poised to end the fiscal year more than $100 million in the red without an infusion of cash. Snyder received the report last week.


"I think we have to learn to make the best out of a bad situation," he said. "The state and the city will have to work together to get us out of this."

"I never fought help, I never pushed back. I’m a team player,” the mayor added.

Neither Bing nor any City Council members were present at the announcement. Snyder said Friday both had made steps towards resolving Detroit's fiscal problems, particularly in the last few months, but it wasn't enough to fix the city's massive debt.

"Additional action is needed to fix the financial crisis in Detroit," he said in a statement. "Chronic budget troubles have taken a significant toll on everyday life for citizens in the city. Detroiters deserve to feel safe when they walk down the street, to have their streetlights on, to have the bus show up to take them to work. Working together in partnership we can and will develop solutions to fix the city's finances, stop the cycle of overspending and one-time fixes and collectively get Detroit on the path to being a great city once again."

However, City Council members are not so amenable to Snyder's vision of the city. Bing indicated he was expecting Council to challenge the decision and was waiting to see what they proposed.

According to the Detroit News, Council prepared a report Friday that called the appointment of an emergency manager "premature" and called instead for a more detailed consent agreement. The city and the state entered into a consent agreement last year that gave a financial advisory board certain powers over the city. The consent agreement was meant as a reform tactic to stave off the need for an emergency manager.

Two other politicians with a stake in the future of Detroit's leadership have taken issue with the review team's findings of a financial emergency. Wayne County Sheriff Benny Napoleon, potential mayoral candidate and former state Rep. Lisa Howze, who has announced she will run for the position this year, disputed the inclusion of the Water and Sewerage Department's $6 billion long-term debt. Their debt is separate from the city's General Fund, Napoleon said, and is secured by more than $8 billion in assets.

The emergency manager law itself has also caused concern. The current law, PA 72, was replaced in 2011 by PA 4 to strengthen the powers of emergency financial managers appointed to struggling municipalities and school districts. After PA 4 was repealed by state voters in November, legislators rushed PA 436 through a lame duck session in December. The new law will take effect March 28.

Many have objected to the powers vested to an emergency manager in PA 4 and PA 436 on the basis that it is "undemocratic." They include Tony Paris, lead attorney for the Sugar Law Center, which challenged an older version of the law in 2011.

"[Emergency managers] can unilaterally tear up union contracts, take over pension funds, make and repeal laws, sell public assets, the list goes on," he said in an earlier interview with The Huffington Post. "Imposition of the EM must be understood in the context of the many other methods conservatives are using today to suppress democracy –- especially among people of color and people in poverty."

Liberal site Eclectablog has pointed out that if Detroit were to come under the power of an emergency financial manager, nearly half of Michigan's African-American population would cede local control. Five other cities have EFMs.

If Council or Bing requests a hearing to challenge Snyder's decision, it will take place Tuesday, March 12, the governor said.

Michigan Gov. Rick Snyder

Where Do Michigan Pols Stand On An Emergency Manager for Detroit?

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