Detroit - Governor Rick Snyder announced Friday declared Detroit in a state of financial emergency, paving the way for an emergency manager to be appointed to run Michigan's largest city.
"I believe it's appropriate to declare the city of Detroit in financial emergency based on the review team report," Snyder said during a town hall meeting today. "It's not hard to justify that conclusion."
Snyder said he has a candidate in mind but would not name that person, noting the city has a 10-day window to appeal that ends March 11. A hearing for a possible appeal has been set for March 12.
Snyder said the city has not been able to solve its financial crisis and that outside help is needed. Today "is a day to call all hands on deck
to say there's been too much fighting, too much blame, not enough resources, not enough people working together. The key answer I believe all of us want to get to is growing the city of Detroit."
Friday's decision marks a watershed moment in Detroit's historic collapse, which has been decades in the making.
Last week, a state review team concluded Detroit's financial crisis requires state intervention "because no satisfactory plan exists to resolve a serious financial problem."
The review team found Detroit's cash-flow deficit is nearly $100 million. That's on top of an accumulated deficit of $327 million. The city also has $14.9 billion worth of unfunded pension and employment retirement liabilities, according to the review team report. In five years, it needs $1.9 billion to begin making payments on the debt.
Once the nation's fourth largest city, Detroit was hailed as an industrial hub with nearly 2 million people. Today, after a half-century of population loss, chronic mismanagement and inadequately funded city services, the move solidifies the city's standingas a model of urban decline.
"In this particular case, you have to in some degree look at it as a hostile takeover," said David Bositis, of the Joint Center for Political Studies, a national think tank in based in Washington, D.C.
"Detroit is a very democratic city and it's being taken over by a very Republican and conservative state government. It's not a good day, but things can change."
Earlier, Detroit City Council members called the decision to appoint an emergency manager premature and said they are doing everything they can to avert the takeover. "It would be irresponsible for us to not provide some response," Councilwoman Saunteel Jenkins said of a plan council members are compiling to send to Snyder. If they don't accept it, they don't accept it. We have to do everything we can to try to stop (emergency management) from happening."
Councilwoman JoAnn Watson reiterated her stance that the city should pursue a legal challenge of emergency manager law.
"We should not be going and begging. That would be a big mistake," Watson said. "The citizens would not know who to trust."
Greg Bowens, a political expert and former press secretary for former mayor Dennis Archer, said an emergency manager would be a devastating blow for the morale for the people of Detroit.
"In the end, it means the governor does not have the faith in the people of Detroit to govern themselves in a responsible manner," Bowens said. "It means that in some measure a failure of the system to be able to produce the kind of leaders that is needed to hold a city together. The impact that it will have on everything from the elections to the outlook that people have about the future could not be overstated."
Friday's decision makes Detroit the only major city in the country to operate under some sort of state control. Locally, Benton Harbor, Allen Park, Ecorse, Flint, Detroit and Highland Park school districts are currently under emergency managers.
"Emergency management means the death of democracy in Detroit. It also means disaster for Detroit with the track record of the emergency manager," said the Rev. D. Alexander Bullock, president of the Detroit Chapter of the Rainbow Push Coalition. "There should be a hearing on this. The governor should reconsider."
The only major cities in the country that teetered around insolvency are New York City, Cleveland, Pittsburgh and Washington, D. C. Each emerged out of their financial situations without the state stepping in. In 2000, New Jersey stepped in and took over the operations in Camden. Three years ago, Rhode Island took over cash-strapped Central Falls.
Municipal bankruptcy expert Douglas Bernstein said the step toward reaching fiscal stability has to be made. Detroit can no longer allow the financial problems to go on forever, he said.
"The present situation is intolerable," said Bernstein, an attorney with the Plunkett c00ney law firm in Bloomfield Hills. "(Steps to get finances in order) is recognition you've got a problem and you're on the road to fixing it, rather than continuing to dig a deeper hole
From The Detroit News:
Snyder paves way for EM: Detroit in 'financial emergency' | The Detroit News | detroitnews.com
