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Governor's Dilemma: The Detroit Financial Crisis PDF Print E-mail
Written by Shay Shahid   
Tuesday, 26 February 2013 20:23

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.

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Public Act 4 Repealed- What Next? PDF Print E-mail
Written by John Joyce   
Tuesday, 04 December 2012 19:54

On Election Day, voters in Michigan successfully repealed Public Act 4 by voting "No" on Proposal 1. This caused confusion over whether or not this meant Public Act 72 (the original form of the Act) was also repealed. In the end however, it looks like the decision has been made that Public Act 72 has returned. Michigan's Attorney General Bill Schuette wrote an opinion saying that should Public Act 4 be repealed, Public Act 72 would take its place. However, this decision could be opened up to legal challenges. Both the Flint City Council and the Sugar Law Center in Detroit have issued lawsuits arguing that Public Act 4 and Public Act 72 were one in the same and thus both should be repealed.

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Emergency Manager Law Referendum PDF Print E-mail
Written by John Joyce   
Tuesday, 02 October 2012 20:04

This coming election, voters in Michigan will have the chance to decide the fate of an important law that has affected the lives of many of the state's residents. This is an important part of the democratic process and its use here gives a substantial amount of power to the voters. Michigan's Emergency Manager Law, Public Act 4, is up for a referendum on the November 6th ballot this year. Public Act 4 allows the Governor to appoint an Emergency Manager to take over local governments in times of financial distress. This controversial law allows Emergency Managers to, among other things, disband unions and privatize prisons.

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Commentary: Deficit Elimination Plans PDF Print E-mail
Written by Evan Gross   
Wednesday, 11 April 2012 03:02
As part of the State Revenue Sharing Act, Public Act 140 of 1971 (as amended), each city ending the year with a deficit must submit a Deficit Elimination Plan (DEP) to the Treasury Department detailing a plan of action to correct the condition and bring the local unit’s finances back on the right track. The local unit has 90 days in order to submit their DEP to the Treasury after the end of the fiscal year in which a deficit was found. The Act stipulates that the Treasury must approve of the plan, and that the city must follow through with the plan, or else state revenue sharing funds will be withheld from the city. (Section 21.2) The requirement for a DEP was intended as a tool for the State to keep tabs on city finances and financial management and make sure that cities were not slipping into stress and defaults. In order to qualify for state funding, cities must be held accountable for their deficits and have a realistic and actionable plan to fix them.
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The Review Team Reports PDF Print E-mail
Written by Evan Gross   
Sunday, 01 April 2012 01:41

After over three months of investigation into Detroit’s finances, the State Treasury, through its Financial Review Teams, issued its final report to the Governor on March 26th. The report details the financial struggles of the city over the past six years and brings to light just how big of a hole Detroit has dug for itself. The final report is a key part of Public Act 4, the Emergency Manager Legislation. The Act stipulates that the Financial Review Team can come to one of four conclusions in its report based on its investigations and dealings with the city: 1) Mild or no financial stress, 2) Severe financial stress but with a consent agreement in place, 3) Severe financial stress with no consent agreement worked out, or 4) Financial emergency with no satisfactory plan (Emergency Manager recommended). In Detroit’s case, the Financial Review team stopped short of recommending an Emergency Manager to be appointed to the city, instead going with the third option of severe financial stress with no consent agreement.

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Michael Raley is a fourth year Sociology and Public Administration/Public Policy student at Michigan State University. He is especially interested in the public policy, politics, and sociology of urban space, as well as transportation systems and public transit. A native of the Grand Rapids area, Michael is currently an intern in the office of State Representative Roy Schmidt, who represents the west and northeast sides of the city. He also aspires to pursue a career in urban and regional planning, and hopes to attend graduate school for such a course of study.

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