Emergency Manager Close for Detroit

As expected, the state-appointed financial review team for the City of Detroit concluded their work and provided their report to Governor Snyder this week, unanimously recommending an emergency manager be appointed to assume power in the city. The state’s new emergency manager law, Public Act 436 of 2012, takes effect March 28^th and provides enhanced powers to the appointee.

The report’s recommendations for the appointment of an emergency manager are based on the findings of a cash deficit set to hit $100 million by June 30^th of this year, long-term liabilities of more than $14 billion, a 2011-2012 fiscal year budget deficit of more than $325 million and a government structure preventing change.

The report indicated the most striking number was what the city’s overall, cumulative deficit would be had long-term borrowing not been used to conceal annual deficits: $937 million. Further, State Treasurer Andy Dillon and others point not just to spending problems, but extreme variances over estimates of revenues. Other media outlets reported this week that less than half the city’s homeowners pay their property taxes.

The Governor has 30 days to make a decision regarding the findings of the report; however, he has indicated he will be deciding within a week or so.

posted by PAA Online , Friday, February 22, 2013 11:06 AM
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