Michigan Takes Over Detroit Money Crisis
Detroit — Citing runaway deficits and long-term debts Detroit could never repay on its own, Michigan Gov. Rick Snyder yesterday pulled the trigger and announced he will appoint an emergency financial manager for the state’s largest city. Snyder said he has a top candidate in mind, and that person would be in charge for 18 months.
The decision means Motown will soon have a new boss in charge of restructuring Detroit’s dire financial mess. That restructuring likely will include drastic cuts in public services and a top-down rethinking of the type of government a shrunken city with a dwindling tax base can afford.
In many ways, those questions have been nipping at Detroit for decades, but the issues came to a head over the last 18 months as increasingly dour economic forecasts found a city unable to address fundamental questions about its debt.
“I look at today as a sad day, a day I wish had never happened in the history of Detroit, but also a day of optimism and promise,” Snyder said.
He reiterated that Detroit, once among the most prosperous cities in the nation, “went from the top to the bottom over the last 50 years,” losing more than half its population.
Detroit is teetering under $14 billion in long-term bond debt and retiree pension and health obligations.
State Treasurer Andy Dillon said that he believes the state will help out with quick action on fixing Detroit’s broken streetlights this summer and, in a restructuring of the Detroit Police department, restoring some of the pay cuts the force has taken in recent years.