Dave Bing Could Ask State To Loan Detroit Up To $150 Million: Reports
This story has been updated.
Observers have agreed that Detroit needs more than massive concessions from city workers and further cuts to city services to stay afloat. At some point, the city will need money to keep operating -- as soon as April by current projections.
In a bid for cash, the Wall Street Journal reported Thursday that Mayor Dave Bing intends to seek a short-term loan from the state of up to $150 million.
The mayor told the paper Lansing can help Detroit in the short term, or suffer the longterm financial consequences of the city's continued crisis and even a possible municipal bankruptcy.
"If Detroit fails or doesn't make it or doesn't come back as soon as we would like it too, it's going to cost the state money anyway," Bing said. "It's you pay me now or pay me later."
Gov. Rick Snyder has so far been unwilling to loan the city money -- or provide the $220 million the mayor and City Council say the state owes Detroit under a past revenue sharing agreement.
Detroit Democrats introduced a bill to the state House in December that would ensure the city sees that $220 million in state tax revenue, "payments previously authorized but not paid" under Michigan's revenue-sharing law.
Snyder has indicated he has no plans to push for the state to resolve its revenue sharing accounts with the city. And the governor told the Detroit News this week that a loan to Detroit "doesn't make a whole lot of sense."
Republicans in the state legislature, which would have to approve an appropriation for a state loan, seem equally unlikely to back a request from the mayor. MIRS reports Friday that Michigan Senate Majority Leader Randy Richardville (R-Monroe) said an emergency manager would be a "better alternative for Detroit" than an influx of $150 million.
A state-appointed financial review team is currently investigating Detroit's financial situation, and must decide whether to recommend an emergency manager or some other course of action by March 28.
Both Bing and Snyder have said they aren't interested in seeing an emergency manager take over Detroit, but Snyder hasn't ruled out the possibility completely.
With or without an emergency manager, the city faces a cash shortfall next month, and Bing has seemed more willing to look for revenue solutions.
"It's not about cutting our way of of this," Bing said in his State of the City address Wednesday night, adding the city needed "tangible support" from Lansing.
It's possible that state lawmakers could approve a loan for Detroit if it were tied to other measures. The state recently agreed to front cash to the troubled Highland Park Schools system, but only once an emergency manager was in place to act as steward for the funds.
UPDATE: 4:00 p.m. -- In response to several media inquiries Friday, Patton sent a release denying that the mayor will request a specific loan from the state.
"Mayor Bing has not asked Gov. Snyder for a loan from the state for $125-$150 million," she said, chalking the Wall Street Journal report up to confusion:
In response to a reporter's question about whether he would ask Gov. Snyder for bridge funding for the city, the Mayor simply replied, "That's possible.'" When the reporter later asked how much he would like to ask for, the Mayor responded with the above mentioned range.
“The city continues to implement the financial restructuring plan the Mayor announced in January to save $102 million this year and $258 million in 2013," said Kirk Lewis, Mayor Bing's chief of staff. "The savings to keep the city financial solvent will be achieved through the plan, including the ratification of previously announced tentative agreements with the city's labor unions."