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Detroit’s long term liabilities stand at a whopping $14 billion dollars, and now the methods for resolving the budget crisis are in Michigan Gov. Rick Snyder’s hands after a review board found that the city was in a financial emergency with “no satisfactory plan” to resolve it.
Republican Gov. Rick Snyder has 30 days to decide whether to assign an emergency manager to resolve Detroit’s fiscal crisis.
The independent review board determined that Detroit’s debts could have reached $900 million last fiscal year had it not borrowed enormous amounts of money.
State Treasurer Andy Dillon says the city could find a way out of its financial situation if it worked with the state.
“It’s our hope at the state level that this is a partnership. It doesn’t have to be adversarial,” said Dillon, a member of the review team. “A lot of the ingredients for the turnaround of the city are in place. Now we just need to execute. I do believe strongly that Detroit is fixable.”
The city has already agreed to allow some state oversight into its financial dealings, but in many instances, the city has been unable to meet benchmarks set by the state.
Dillon says part of the problem is that the state has been running a deficit since 2005, and borrowing more money to cover it up.
“The political will has often not been there to make the necessary and bold fiscal reforms. … Without a doubt we need the support and accountability that a State of Michigan partnership offers. We cannot address our legacy obligations alone” said Gary Brown, City Council president pro-tem.