(Image source: Michigan Governor’s Office)

BY MIKKEL NOEL LANZKY


The City of Detroit is on its last economic legs. The mayor’s office, the city council and city worker’s unions have not been able to agree on necessary cuts to Detroit’s budget, and Michigan Governor Rick Snyder is preparing for a state takeover.
CNN affiliate WDIV Local 4 has the story.

“Mayor Dave Bing has heard from Governor Snyder, who says he’s ready to begin a 30-day review of the city’s finances that could begin as early as today. It’s considered the first step that could lead to an emergency manager.”

Detroit is set to run out of cash in April of next year if deep cuts are not made. On Friday, state treasurer Andy Dillon spoke with The Detroit Free Press.

"The longer we wait to address Detroit's financial problems, the more painful the eventual solutions become."

It’s Detroit’s accumulated deficit of more than $150 million that has state officials on their toes. To prevent a state takeover, Mayor Bing is asking unions to accept layoffs and cuts in benefits, the Wall Street Journal reports.

“He wants to reduce Detroit's staff, cut wages by 10%, loosen work rules and increase workers' share of health-care and pension costs […] privatize management of the city's struggling bus system and its troubled public-lighting department.”

And the discussion of a state takeover became heated when Mayor Bing pointed out Michigan owes Detroit $220 million. But, as The Detroit News’ Nolan Finley notes:

“[Mayor] Bing had to know when he raised the issue that the state doesn't have the $220 million to give. […] That's what happens in an economic collapse. All Bing accomplished is to make what will already be a difficult decision that much harder for Snyder.”

Detroit is not the only city in Michigan having trouble balancing the books, but it is by far the biggest. If the city gets a state-appointed emergency manager, it will be the fifth city to get one, after Pontiac, Ecorse, Flint and Benton Harbor.

Transcript by Newsy.

Politics News

Michigan Governor Prepares Detroit Budget Takeover

December 4, 2011
(1:46)
Detroit politicians scramble to retain control of the budget as Michigan’s governor takes first steps to intervene in the city’s financial crisis.
   
TRANSCRIPT

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