Financial Review Team Declares Detroit in 'Financial Emergency'
- Category: Detroit
- Published on Wednesday, 20 February 2013 07:00
- Written by The Michigan Chronicle
- Hits: 90
Officials in Lansing have determined that Detroit is in a state of 'financial emergency' with no solid plan for recovery.
The decision was made by a team of six individuals appointed by Governor Rick Snyder in December to review the city's finances. The governor will use the findings to decide whether or not to appoint an emergency manager. An announcement could be made as soon as March 27.
The state-appointed team made their decision based it problematic elements related to Detroit's General Fund and its Charter as well as long-term liabilities. Billion dollar debt coupled with a tremendous budget deficit and poor cash flow are undoubtedly to blame for the ultimate determination. Detroit now depends on bond money from a state-held escrow account to pay its bills.
Nearly a year ago, the city found itself in a similar situation. It was given an opportunity to balance the budget through the consent agreement made between the city and state in March 2012. Shift forward to the present, and things appear as bleak as ever.
Detroit Mayor Dave Bing has responded to the report, stating that he is not surprised by the findings. He cites the financial stress the city has been under as the driving force behind its current condition.
This recent development has shifted the discussion from "if" to "when" concerning Snyder's possible appointment of an emergency financial manager. The question is, who will it be?
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