Detroit in trouble

Trouble ahead for Detroit as the Governor of Michigan considers whether to appoint an emergency manager in order to avert financial disaster in the city. Over the last year Detroit has made a great deal of progress in trimming back costs, but nowhere near the amount it needs to make to avert financial disaster. There is a certain sense of inevitability among some about the chances of a state-appointed financial manager.  Nonetheless any appointment is bound to cause some controversy given the size of the city.

On my last visit to Detroit, one skeptic, a local reporter, felt that bankruptcy was inevitable. If it is, the state-appointed review team were certainly putting on a brave face. When they concluded their review they said bankruptcy was avoidable.

Detroit 

Skid row

A state takeover of Detroit, once America’s third-largest city, looks likely 

Feb 23rd 2013 | CHICAGO |From the print edition

THE city of Detroit has been in financial difficulty for so long that it has become almost an article of faith on the streets that, somehow, it will manage. But on February 19th it became highly unlikely that it will be allowed to muddle on for much longer. A state review team concluded that there was a local-government financial emergency in Detroit and no way of resolving the situation.

The governor of Michigan, Rick Snyder, has 30 days to respond, but most people think he will take far less time than this to appoint an emergency manager. A looser power-sharing agreement between the city and the state has already been tried over the past year and has, clearly, failed. The authority of elected officials, including the mayor and the city council, will be suspended and the manager will assume control of public contracts, city assets, staff, pay and benefits. Reports suggest that Mr Snyder already has a shortlist of candidates for the job.[More...]