Michigan Gov. Rick Snyder said that he's at least a week away from deciding if Detroit needs an emergency manager to confront its $327 million budget deficit and $14 billion long-term debt.
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DETROIT — Some people are already telling Michigan Gov. Rick Snyder that they don't want the job of fixing Detroit's financial woes, even before he's decided whether he's even going to appoint an emergency manager, Snyder said.
The Republican governor made it clear today during a media round table that he's still considering a review team's report that says Detroit is in a financial emergency, and that it would be at least another week before he makes a decision on whether to appoint someone to take over the city's financial reins.
Still, Snyder said his office has spoken to "a lot of people" about the possibility.
Asked during a short, one-on-one session with The Associated Press if any potential candidates for such a job had already declined it, Snyder responded: "Oh yeah. There were quite a few people who were in that camp. Because if you think about it, and this is not to imply we're going to do one, but it would be an extremely challenging position."
Challenging may be an understatement.
Mayor Dave Bing has placed the city's current budget deficit at about $327 million. The report given to Snyder Tuesday by the state-appointed review team said the accumulated deficit as of June 30, 2012, would have topped $900 million if Detroit leaders in recent years had not issued bonds to pay some of its bills.
Long-term liabilities, including underfunded pensions, is more than $14 billion, and in recent months the city has relied on bond money from an escrow account to meet its dwindling cash flow needs and to pay city workers.
The review team also said that because of its cash deficit the city would have to either increase revenues or decrease expenditures, or both, by about $15 million per month between January and March to "remain financially viable."
Today, Snyder described the city's predicament as "quite dire" and pointed to Detroit's massive loss of people since the 1950s. The city's population dropped from about 1.8 million then to just over 700,000 in the 2010 U.S. census.
With the decreased numbers of people, property and businesses taxes also have dropped.
"We need to grow the city of Detroit," Snyder said. "That's the answer here and it's going to be really hard. I want to make sure people understand how difficult this is going to be."
But he insisted that the situation is "solvable," if the city works with the state and an emergency manager if one is appointed.
"The solution to this problem is not going to be by people fighting with one another, or blaming one another," Snyder said. "Who is going to want to stay in the city of Detroit? Who is going to want to move to Detroit, if all they hear are fighting and blame?"
Under current state law, emergency financial managers have charge of the city's budgets, spending and other financial decisions. Those responsibilities now fall to elected mayors and city councils.
Bing had no comment today on Snyder's comments. Bing last year submitted a restructuring plan to the state. He has said an emergency manager would encounter the same problems, broken systems and roadblocks he's had to endure.
He said the city needs money. Snyder doubts that would be coming from state coffers.
"I don't see the state coming to do a massive bailout," the governor said. "That's not the answer here."
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