Michigan Mulls Taking Over Detroit's Finances

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The city of Detroit is rapidly running out of cash. Michigan's governor wants the state to either help run the city's finances or impose an emergency manager with total authority over budgetary matters. A final decision will be made this week.


The city of Detroit is broke - verging on bankruptcy, in fact. And we may have come to a moment of reckoning. This week, Michigan's governor is giving city officials a choice: either they allow the state to help run Detroit's finances, or the state will appoint an emergency manager with total authority over budgetary matters. WDET's Quin Klinefelter reports.


QUIN KLINEFELTER, BYLINE: At a recent public meeting of the state board reviewing Detroit's financial situation, long-time activist Sandra Hines stands among about 40 people, declaring that the Motor City is off-limits to outside officials.

SANDRA HINES: You don't have the right to come in and take our city from us and tell us what to do. I'm so tired of being in war mode. This is a war, y'all. They literally have declared war on us. And we are assembling our troops to fight you back.

KLINEFELTER: Such protests are as much a part of Detroit's history as the automobile. But right now, the city is precarious financial straits, facing a roughly $200 million budget deficit, its credit sharply downgraded by Moody's and Fitch's rating services and needing a loan just to meet payroll for the next few months. Governor Rick Snyder has repeatedly appeared on local talk shows and staged town hall meetings, stressing that he does not want to take over the city, but cannot let Michigan's signature Motor City drown in red ink.

GOVERNOR RICK SNYDER: Detroit has run a deficit since 2005 of significant dollars. It's borrowed over $600 million just to get by. It's just borrowing another $137 million to continue the old way of doing things that just didn't work here.

KLINEFELTER: The governor is pushing for a consent agreement with city officials that would enable the state to impose a new board analyzing budgets crafted by Detroit's mayor and city council and a new project manager who would have the final say over financial matters. If the deal is not approved by this week, the governor says he'll have no choice under state statutes but to appoint an emergency manager with sweeping authority, effectively leaving the mayor and city council with no power. But some members of the Detroit city council, like JoAnn Watson, say the governor is forcing the issue because a state petition drive currently underway could, if successful, suspend the emergency manager law.

JOANN WATSON: We've got to do it now. You got to approve it this week. It's all about those signatures. There's a game being played on the city. It's called we're going to push you against the wall, act as if you can't govern yourselves. We should do nothing at this table to consent to anything until those citizen signatures are certified.

KLINEFELTER: For some Detroiters, the possibility of a mostly white group of state lawmakers taking over the city's majority black population smacks of racism. But that's not what a member of the state review board says he's hearing. Conrad Mallett is African-American, a native Detroiter, and says people on the street are not concerned about black or white, but about green - finding funding to pay for more police or help insure buses, ambulances and fire trucks run on time.

CONRAD MALLETT: They have reached a point where the disorganization and dysfunction associated with the regularly expected delivery of city services is so bad that people have concluded that: Why should I pay my taxes for the services that I'm not getting?

KLINEFELTER: With or without an emergency manager, the city will almost certainly have to sell assets, outsource work and cut employees. The governor has set a Thursday deadline to set a final decision. For NPR News, I'm Quin Klinefelter in Detroit.

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