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Michigan Governor to Issue Decision on Detroit Emergency Manager

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March 1 (Bloomberg) -- Michigan Governor Rick Snyder will announce today whether he’ll appoint an emergency manager to run Detroit, which ran up a $326.6 million deficit in 2012 even after striking a deal with the state to control costs.

Snyder, in a town-hall meeting at noon in Detroit, may concur with a Feb. 19 state report that declared Michigan’s largest city in a financial emergency with no satisfactory plan to reverse it. He then could name an emergency manager, although the city would have 10 days to request a hearing to argue against one.

Detroit would be the sixth Michigan city under state control, as Snyder tries to avoid the largest municipal bankruptcy in the U.S. The 54-year-old Republican has said he didn’t want responsibility for the troubled city, though he also enacted a law that gives emergency managers powers such as selling municipal assets and canceling union contracts.

Detroit has lost more than one-fourth of its population since 2000, and declining tax revenues have led to inadequate police and fire protection, broken street lights and unreliable buses for its remaining 707,000 residents. Snyder said last week the city must attract new residents to be viable.

Mayor Dave Bing has said his plans to turn around the city have been stymied by lawsuits, union contracts and lack of money.

Among opponents of a takeover are candidates in this year’s mayoral race, who said the report exaggerates Detroit’s long-term debt. The report calculated total debt at more than $14 billion, though that includes revenue bonds for a city water and sewer system that serves much of the region.

To contact the reporter on this story: Chris Christoff in Lansing at cchristoff@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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