CHICAGO – Michigan Gov. Rick Snyder prepared for a state takeover of Detroit, an epitome of urban decay, by declaring the Motor City in a state of financial emergency Friday.
“Detroit can’t wait,” Snyder said at a televised town hall meeting. “We need to solve real issues here today because citizens are not getting the services they need and we have a financial crisis.”
The move by a white, Republican governor to take control of a predominantly black and Democratic city has drawn intense criticism and charges of racism.
“It’s undemocratic and not a solution to the city’s problems,” said John Philo, director of the Sugar Law Center for Economic and Social Justice, which has challenged the emergency management laws in court.
Detroit needs a partner, not an “overseer,” said the Rev. Wendell Anthony, who heads of the Detroit chapter of the NAACP civil rights group.
Snyder sidestepped a question about the racial implications of his move but insisted the appointment of an emergency manager does not mean the end of democracy. “This shouldn’t be about politics,” he said, noting the City Council and the mayor can participate in the process. “Let’s all keep working together.”
Several City Council members have vowed to block the move.
Detroit Mayor Dave Bing, who has been widely praised for cleaning up after a succession of corrupt predecessors, said Snyder’s plan must include more financial assistance from the state of Michigan.
“We have always said that we need help from Lansing to implement our initiatives, such as public safety, transportation, lighting and others,” Bing said, referring to Lansing, the state’s capital. Bing has long opposed having an emergency manager for the city.
“There is a way for us to work together,” he said, if the emergency manager focuses not just on the city’s finances, but also on restructuring initiatives to improve the quality of life.
Supporters of the takeover say it is the only way to tackle Detroit’s seemingly intractable problems.
Emergency managers have the power to eliminate entire departments, change labor contracts, sell city assets and rewrite laws without any public review or input.
Currently in control of four smaller Michigan towns and cities and three school districts, the success rate of such managers is the subject of much debate.
Once the fourth-largest city in the United States, Detroit has seen its population shrink by more than half from 1.8 million people in 1950 to 713,000 today.
Racial tensions sparked by the civil rights movement — and the devastating 1967 riots — exacerbated white and middle-class flight to the suburbs. Businesses followed suit, further shrinking the tax base.
With less revenue, the city had to cut back on services, prompting more people to leave.
The birthplace of the U.S. auto industry then saw its main employers go through round after round of mass layoffs as factories were automated or outsourced and Asian competitors siphoned away market share.
Abandoned skyscrapers, factories and homes litter the landscape. Crime is rampant. The city cannot even manage to keep all the streetlights on.
Snyder acknowledged the positive signs seen in Detroit in recent years, such as a revitalized riverfront and entertainment district.
But Detroit has been borrowing money for too long to pay its bills. It is rapidly running out of cash to operate and is expected to end the fiscal year $100 million in the hole. More troubling are its long-term liabilities, including the cost of pensions and retirement health benefits, which exceed $14 billion.
The city has 10 days to appeal, but the final decision rests with Snyder. The emergency manager, who has not yet been named, will be up for review in 18 months.
The governor’s office cautioned the plan will not necessarily be able to stave off what would be the largest municipal bankruptcy in U.S. history.
“The possibility of bankruptcy still exists, but only after the manager has exhausted all other options,” it wrote in a fact sheet.
Jefferson County, Alabama, became the largest U.S. municipal bankruptcy in November 2011, involving $3.14 billion of bonds. California’s Stockton, with almost 300,000 residents, and San Bernardino, with about 213,000, sought court protection last year. No Michigan localities have entered bankruptcy.
Snyder bemoaned Detroit’s descent from being one of the most prosperous and successful cities in the United States to “among the worst” and vowed to get the city back on track.
“We put the country on wheels, we put the world on wheels, we were the arsenal of democracy,” Snyder said.
“We can and will develop solutions to fix the city’s finances, stop the cycle of overspending and one-time fixes and collectively get Detroit on the path (to) being a great city once again.”