Detroit Bankrupt? Rick Snyder May Soon Appoint Emergency Manager to Reeling City

A review team assigned by the state of Michigan declared Tuesday that the city of Detroit is in a state of "Final Emergency." 

This once booming city that thrived on the American automobile industry is on the verge of bankruptcy after a long and tumultuous economic decline. Gov. Rick Snyder will now have the green light to go ahead with Michigan’s emergency manager law, which calls to appoint a manager to financially struggling local governments of the state. Based on the law’s unsuccessful history, Gov. Snyder may have some difficult days ahead in hopes of saving Detroit.

The financial review board released their report on Tuesday to Snyder citing that, “no satisfactory plan exists to resolve a serious financial problem.”

State Treasurer Andy Dillon discussed the report in a press conference on Tuesday, urging Gov. Snyder to take the recommendation and appoint a manager to aid Detroit for financial stability.

Here are some highlights from the press conference, courtesy of the Detroit News:


"We believe there's a financial emergency in the city and that there's no plan in place to correct the situation … I do believe strongly Detroit is fixable,” he said.

Detroit Mayor Dave Bing shared the same sentiments as Dillon on the recommendation to the governor.

"My administration has been saying for the past four years that the city is under financial stress. If the governor decides to appoint an emergency financial manager, he or she, like my administration, is going to need resources — particularly in the form of cash and additional staff,” Bing said.

If Gov. Snyder follows through with appointing a financial manager, he will be abiding by legislation known as Public Act 72. This law has not had a great track record however. Public Act 72 was initially proposed to replace similar legislation referred to as Public Act 4. Public Act 4 was repealed my Michigan voters when it was placed on the ballot come Election Day. Most recently the Michigan Supreme Court came to the aid of the Governor when rejecting a legal challenge against Public Act 72, on Jan. 18.

Under the law, the appointed manager would oversee all financial affairs of Detroit. In addition, the manager would be the only official that can have the jurisdiction to declare bankruptcy for the city. Based on the nature of this position, Detroit residents may feel uneasy at the prospect of an outsider holding all financial power of the struggling city.

Since the review team’s report released Tuesday, Gov. Snyder now has 30 days to decide if Detroit is in fact in a financial emergency. If he agrees with the financial board, then he can proceed with the emergency manager law.

Snyder may face some disgruntled citizens, though. While desperate times call for desperate measures, local governments of Michigan will have to come to some sort of agreement with the state legislature in hopes of devising an effective plan to save the crumbling city of Detroit.

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Shawna Gillen

Shawna is currently studying Political Science and Psychology at Marist College. She has a passion for politics and is an aspiring lawyer. In her spare time she likes to play club women's rugby, and contributes as the Co-News Editor for Marist's student newspaper.

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