LANSING, Mich. — Time ticks for the city of Detroit as its burgeoning fiscal crisis and its dispute with the state likely will come to a head soon.
According to news accounts and analysts, the city will see either a state-appointed emergency financial manager early in the New Year or a new consent agreement to give it continued control but tighter deadlines to restructure its finances.
The Detroit News, citing multiple sources, reported over the weekend that state leaders were at work on a new consent deal that would be offered in January and would kick in when Michigan’s latest emergency-financial-manager law goes into effect by early April.
Whether that deal will come to fruition is uncertain as negotiations continue amid frustrations in Lansing over the amount of progress city leaders have made — or rather, not made — on getting their financial house in order.
Just last week, Michigan Gov. Rick Snyder called for a second review team to scrutinize the financially beleaguered city’s finances. The team review, led by State Treasurer Andy Dillon, is a precursor to the state invoking its newly revamped emergency-financial-manager law, which was approved before the state Legislature recessed earlier this month after a productive and contentious session that also made Michigan the nation’s 24th right-to-work state.
Holding a pre-holiday media round-table last week, Mr. Snyder was noncommittal about a state takeover and an emergency manager, but he said they remained a possibility and Detroit would have to act soon or the state would do so.
“I’m waiting for the report from the review team,” the Republican governor told reporters.
“They are in a crisis,” he said of the city. “They have been in a crisis, and it’s getting worse every day. I continue to encourage the mayor and city council to work together to do as much as possible.”
In spite of his measured tone, however, Mr. Snyder acknowledged that the clock was ticking.
“We need to take action,” he said. “That action will take place in the future.”
But even as the News said a consent deal remains in the mix, some political observers said as recently as last week that they think an emergency financial manager is no longer an “if” but a “when” for the state to step in to revamp the city’s more than $200 million deficit and avert what some fear is a certain bankruptcy.
“I would project by the middle of January you would have the person announced,” as emergency manager, said Troy-based political consultant Eric Foster of Foster McCollum White & Associates.
“If you really want to fix the situation here, that is the only way you can do it,” Mr. Foster said.
Despite the increasingly dire straits for Detroit’s finances, and a piecemeal approach to fixing emerging problems, some city leaders have argued that they — not outsiders — should be the one’s to handle this crisis.
But many allow that even after much talk from the mayor and the city council, including a new revenue-enhancement plan the mayor pushed out last week, few ideas for a long-term, comprehensive fix have been put forth, making the state’s intervention increasingly likely.View Entire Story
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