Michigan governor to declare Detroit fiscal emergency: source

LANSING, Michigan Thu Feb 28, 2013 6:20pm EST

Michigan Governor Rick Snyder talks about the future of the city of Detroit during a news conference in Detroit, Michigan February 21, 2013. REUTERS/ Rebecca Cook

Michigan Governor Rick Snyder talks about the future of the city of Detroit during a news conference in Detroit, Michigan February 21, 2013.

Credit: Reuters/ Rebecca Cook

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LANSING, Michigan (Reuters) - Michigan Governor Rick Snyder will officially declare a financial emergency for Detroit on Friday, paving the way for a state takeover of the city, a state government source said on Thursday.

At a forum in Detroit, the Republican governor will endorse the February 19 findings of a six-member review team that concluded the city's dire financial situation constituted an emergency, according to the source, who asked not to be identified.

Sara Wurfel, Snyder's spokeswoman, said the governor will outline "his determination on whether or not there is an emergency."

The official declaration of an emergency for Michigan's biggest city will trigger a 10-day deadline for Detroit officials to request a hearing with Snyder. It will likely result in the appointment of an emergency financial manager to manage its fiscal affairs.

The review team said the city is plagued by "operational dysfunction," but made no official recommendation on the need to appoint an emergency financial manager, leaving that to the governor.

Detroit, which has been struggling for years with a falling population, shrinking tax base and large payroll for city services, has been operating since April 2012 under an agreement that gave the state some oversight. But the slow pace of reforms led Snyder to launch a new review of the city last December.

If the state decides to appoint an emergency financial manager, that person could decide the city's only course for survival would be a bankruptcy filing in what would become the largest municipal bankruptcy in the United States.

The emergency manager would be officially chosen by a state board composed of the state treasurer, budget director, and licensing and regulatory affairs director - all of whom are Snyder appointees.

Snyder has publicly discussed qualifications he would seek in the manager and has said he had a short list of candidates for the job.

(Reporting By Dawson Bell; Additional reporting by Karen Pierog; Editing by Greg McCune and Leslie Adler)

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Comments (34)
chazz43 wrote:
Thank god somebody has the guts to govern this corrupt sicken money hole.. I just wish the Thieves that lined their pockets would be punished.. Thank You Mr Synder God Speed..

Feb 28, 2013 7:13pm EST  --  Report as abuse
brodave wrote:
Citizens Beware!

Detroit, America’s Cesspool, is the economic model that Obama and his ilk are dictating for all of the USA.

Chicago, The Murder Capital of America, is the model Obama and his ilk are dictating for gun control for all of America.

They must be impeached.

Feb 28, 2013 8:13pm EST  --  Report as abuse
Dontthinkso wrote:
A financial emergency?

I would be more inclined to call Detroit a financial black hole.

Here is the prime example of the Great Society and all the social programs that have followed and how they have miserably failed the people of Detroit. And now the rest of Michigan will be footing the bill.

Feb 28, 2013 8:19pm EST  --  Report as abuse
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