Michigan governor clears way for state takeover of Detroit

by Steve Neavling, Reuters.com  |  published on March 4, 2013

Michigan Governor Snyder talks about the future of the city of Detroit during a news conference in Detroit

Michigan Governor Rick Snyder cleared the way for a state takeover of Detroit, declaring that the birthplace of the U.S. automotive industry faces a fiscal emergency and that he has identified a top candidate to assume its management.

Friday’s declaration by the Republican governor virtually assures that the state of Michigan will assume control of Detroit’s books, and eventually decide whether the city should file the largest municipal bankruptcy in U.S. history.

Detroit has faced the steepest population decline of any major American city in recent decades. Once the fifth largest U.S. city and springboard for music icons such as Michael Jackson and Diana Ross, it now ranks 18th in size with about 700,000 people.

“Its time to say we should stop going downhill,” Snyder told a forum of residents hand-picked by his office, at a Detroit public television station. “There have been many good people who have had many plans, many attempts to turn this around. They haven’t worked,” he said.

A report commissioned by Snyder has described what it called “operational dysfunction” in the city government, crushing debt of $14 billion and a current fiscal year budget deficit of $100 million.

Detroit Mayor Dave Bing did not attend the announcement, nor did city council members appear to be in the audience. Earlier on Friday, a majority of the council said they wanted to challenge Snyder’s decision but did not decide how to proceed.

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