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Detroit State Of The City: Mayor Dave Bing Expected To Address Emergency Manager, Consent Agreement Rumors

Detroit State Of The City

The Huffington Post   First Posted: 03/ 7/2012 10:02 am Updated: 03/ 7/2012 11:13 am

Detroit Mayor Dave Bing is set to give his annual State of the City address from the Coleman A. Young Municipal Center Wednesday night. But the "state of the city" will most likely become a discussion of the "state of the city's finances," with Detroit's cash flow and fiscal health at the forefront of the mayor's agenda.

The city faces a $46 million cash shortfall by the end of the fiscal year in June, and Wednesday's speech is widely seen as critical for Bing, as he works with city and state officials to resolve Detroit's financial problems and avoid a state takeover.

Gov. Rick Snyder in December appointed a financial review team to examine the Detroit's books and determine whether to recommend an emergency manager for the city. A state-appointed emergency manager could strip elected officials of their power, break city contracts and sell public utilities.

To shore up the city's accounts, Bing in January unveiled a cuts and savings plan that led to 1,000 layoffs and outsourced the city's Department of Transportation. He has also obtained tentative agreements for massive concessions from the city's unions.

The Free Press reports Tuesday that Bing and Snyder have privately decided to pursue a consent agreement for Detroit, which would allow the mayor greater power but avoid the appointment of an emergency manager. The consent agreement would be part of a "financial rescue plan" that the paper says "could look similar to a structured bankruptcy."

The Detroit News reports confusion remains about who would carry out a consent agreement -- the mayor, City Council or other officials.

Critics, including City Council President Charles Pugh, say a consent agreement makes Bing a sort of de facto emergency manager, since it would grant the mayor the power to force concessions on city unions and to sell public assets.

Others have said neither a consent agreement nor an emergency manager would be enough to resolve the city's financial problems, pointing to a simple need for more cash on hand.

On the revenue side, Bing has previously asked the state to provide more than $220 million it owes Detroit under a past revenue-sharing agreement, and has also sought state help in collecting city income taxes. He also proposed raising the city business tax from 1 percent to 1.9 percent. Whether the mayor intends to stick to those revenue demands -- or pursue further cuts -- remains to be seen.

HuffPost Detroit will be following the State of the City speech live at 7 p.m. Wednesday night. Check back here for updates.

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