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    Since the beginning of 2013, Detroit has been under media scrutiny more than normal due to its increasing unstable financial situation. Recently, the city's largest union (AFSCME -American Federation of State, County and Municipal Employees) filed a lawsuit against Mayor Bing's administration alleging "unfair labor practices" of furloughs on its 600 unionized employees. However, it is the six-member Financial Review Team's unanimously prepared report that has sent jitters through the Michigan's largest City Hall. The likelihood of Governor Snyder appointing an emergency Financial Manager has increased substantially.

    . In a report delivered by State Treasurer Andy Dillon, the review team revealed that Detroit, on the top of its accumulated deficit of $327 million is now facing a cash flow deficit of more than $100 million with no spending cuts insight by June 30. The City has been involved in long-term borrowing that can put a mask over its annual shortfall. However, without loaned out money, deficits would have totaled $937 million in fiscal year 2012. Andy Dillon criticized city officials for not emerging with a significant plan but, believes that Detroit has "one more bite of an apple to get it right" and that is - an Emergency Financial Manager.

    The ball is now Governor Rick Snyder's court to announce a final verdict. He could appoint an EFM to avoid Michigan's largest city form sinking into bankruptcy, or could maintain the status quo, i.e. state's financial supervision of the City through a new consent agreement. But critics believe that the latter option now seems very bleak, especially after the report has found Detroit in a financial emergency ‘twice' in a year. The Governor has thirty days to approve or reject the review team's recommendations, but there is no statutory deadline. However, a new EM law will go into effect at the end of March, potentially making this scenario a bit trickier.

    Many believe that Gov. Snyder is in no hurry because he remains very vigilant to the reactions he would be facing from many Detroiters if he decides on a short-term state take over. He is trying hard to explain his solution for Detroit among the city's various civic and religious leaders. The Governor's plan would eventually hand back authority to the locals in eighteen months after its debt would be under control and a promising administrative culture would emerge.

    This all depends on whether a state appointed manager with all his/her legal powers could be able to inject meaningful changes to the dysfunctional and debt-ridden city in just 18 months. Realizing that Detroit problems go far beyond administrative failures, no one can answer this with assurance.

    Detroit's decreasing revenues are not only due to those who have left the city, but also because of those who are still living there. Recent coverage in The Detroit News suggests that half of its homeowners have not paid property taxes in recent years, meaning "some $246.5 million in taxes and fees went uncollected". Defaulters believe that a municipality unable to provide adequate services does not deserve to be paid back in taxes.
    One thing is certain in this current state vs. city bout; if Governor Snyder appointee' fails to deliver, the entire blame would fall upon the shoulders of his administration, particularly on him alone. Moreover, EFM's failure would be a definite boost to Mayor Bing's undermined image, even if he loses his re-election bid. Not surprisingly, the Detroit mayor does not believe that any emergency manager could accomplish anything different than his own staff, even though his own efforts to bring effective and immediate reforms in the Motor City have been labeled "inadequate".

    Regardless of what pundits say, Gov. Snyder is expected to make an announcement in a few weeks' time. His biggest nightmare could be finding a qualified candidate ready to take on a city with financial issues dating back to 1950s.

     

    Sources:

    Ferretti, Christine. "Detroit AFSCME Sues over Furloughs." The Detroit News. N.p., 21 Feb. 2013. Web. 22 Feb. 2013.

    Finley, Nolan. "Why Snyder Is in No Hurry to Grab Detroit." Editorial. The Detroit News. N.p., 21 Feb. 2013. Web. 22 Feb. 2013.

    Livengood, Chad, Darren A. Nichols, and Christine Ferretti. "Review Team: Detroit Faces Financial Crisis, Has No Plan to Fix It." The Detroit News. N.p., 20 Feb. 2013. Web. 22 Feb. 2013.

    Macdonald, Christine, and Mike Wilkinson. "Half of Detroit Property Owners Don't Pay Taxes. The Detroit News. N.p., 21 Feb. 2013. Web. 22 Feb. 2013.

     

     

     

     

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