By Steve Neavling
DETROIT, March 1 Michigan Governor Rick Snyder
cleared the way for a state takeover of Detroit, declaring that
the birthplace of the U.S. automotive industry faces a fiscal
emergency and that he has identified a top candidate to assume
Friday's declaration by the Republican governor virtually
assures that the state of Michigan will assume control of
Detroit's books, and eventually decide whether the city should
file the largest municipal bankruptcy in U.S. history.
Detroit has faced the steepest population decline of any
major American city in recent decades. Once the fifth largest
U.S. city and springboard for music icons such as Michael
Jackson and Diana Ross, it now ranks 18th in size with about
"Its time to say we should stop going downhill," Snyder told
a forum of residents hand-picked by his office, at a Detroit
public television station. "There have been many good people who
have had many plans, many attempts to turn this around. They
haven't worked," he said.
A report commissioned by Snyder has described what it called
"operational dysfunction" in the city government, crushing debt
of $14 billion and a current fiscal year budget deficit of $100
Detroit Mayor Dave Bing did not attend the announcement, nor
did city council members appear to be in the audience. Earlier
on Friday, a majority of the council said they wanted to
challenge Snyder's decision but did not decide how to proceed.
While Snyder made his announcement on Wayne State
University's campus, a few dozen protesters gathered about two
miles away at city hall, clutching signs that read "Snyder, Go
Home!" and "This is a takeover!"
The fate of Detroit is being watched closely across the
country as many cities and towns are still struggling to recover
from the housing bust and the deep recession that followed.
Snyder would not identify the top candidate to run Detroit
or say whether the person was from Michigan. Some residents and
restructuring experts have said he should name an
African-American to manage the city, which is 83 percent black.
Referring to the candidate, the Republican governor said,
"They have vast experience working on relationships, they have
strong financial knowledge, strong legal knowledge and that
ability to say how do we build teams and work together," the
Republican governor said of the candidate.
Snyder had acknowledged last week that many qualified people
did not want the controversial job.
The emergency manager will eventually have strong powers to
develop a financial plan, revise or reject city budgets,
consolidate departments, reduce or eliminate the salaries of
elected officials, sell eligible assets, lay off workers and
renegotiate labor contracts.
Reaction in the city ranged from anger to despair and
Mayor Bing, a former professional basketball player and
steel executive, said he did not favor an emergency manager but
would try to work with the state of Michigan.
"If, in fact, the appointment of an Emergency Financial
Manager both stabilizes the City fiscally and supports our
restructuring initiatives which improve the quality of life for
our citizens, then I think there is a way for us to work
together," he said in a statement.
Bing has complained that part of Detroit's financial crisis
stems from cuts in state funds for the city.
Karen Lewis, 49, a manager at a fast food store, reflected
the resentment some residents feel at the takeover of the
predominantly black and Democratic city by a predominantly white
and Republican state government.
"It don't take a genius to know what this is all about,"
said Lewis, who is black. "They want our money and our land. No
one cares about us. And we're the ones who stuck around. Not the
But Bernard Ragin, 41, said he was tired of living in a city
that has seen a collapse of basic services.
"I don't care who fixes Detroit, as long as the street
lights work and the police show up on time," he said.
Detroit officials now have 10 days to request a hearing with
the governor about his decision. Snyder said the hearing would
be held on March 12. The nine-member city council has been
preparing to argue that Detroit should not have an emergency
manager and could also appeal the decision in state court.
After the hearing, Snyder will either confirm or revoke the
declaration of emergency. If he confirms the emergency, as
expected, management of Detroit's fiscal affairs would revert to
a board composed of three state officials who will be Snyder
appointees. The board would formally appoint an emergency
manager, although in practice Snyder will make the final
Michigan Democratic Party Chairman Lon Johnson sharply
criticized Snyder's decision, calling it a "hostile take-over."
"This overthrow of the democratic process is a deeply
disappointing moment in our state's history," Johnson said.
Al Garrett, president of Detroit's biggest union
representing municipal employees, said efforts are underway to
challenge the decision in court. But he said the case would have
to be filed in federal court rather than state court because the
Michigan Supreme Court has a Republican majority.
A court challenge of Snyder's decision would not delay the
appointment of a manager, a state government official said.
Snyder said that Detroit's creditors should be brought to
the table to renegotiate debt terms by possibly delaying or
"This should be part of the strategy that needs to take
place," he said.