Review team: Detroit is in financial emergency

DETROIT — A state-appointed review team has determined Detroit is in a financial emergency, paving the way for Republican Governor Rick Snyder to appoint an emergency manager who would develop a new plan to get the city out of its fiscal crisis.

The team released its findings Tuesday, saying in a report to Snyder that ‘‘no satisfactory plan exists to resolve a serious financial problem.’’

The review team pointed to the city’s ongoing cash crisis, which has threatened to leave the city without money to pay its workers or other bills. It noted that the city’s deficit could have reached more than $900 million in fiscal year 2012 if the city had not borrowed enormous amounts of money; that Detroit has long-term liabilities, including underfunded pensions, of more than $14 billion; and that the city’s bureaucratic structure makes it difficult to solve the financial problems.


‘‘The city has been running deficits since 2005 . . . (and) masking over those with long-term borrowing,’’ said state Treasurer Andy Dillon, a member of the review team.

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Under Michigan law, Snyder has 30 days to decide for himself whether there’s a financial emergency. Mayor Dave Bing would have 10 days to request a hearing. Snyder could then appoint an emergency manager.

The emergency manager would be responsible for overseeing all city spending. Bing and the City Council would keep their jobs, but the manager would decide all financial matters.

Associated Press