02/19/2013 06:02 pm ET

Dave Bing, Detroit Mayor, Responds To City's 'Financial Emergency': 'I'm Not Surprised'

After a review team appointed by the state of Michigan found Detroit to be in a "financial emergency," Mayor Dave Bing said he was "not surprised."

The review brought to light the city's long-term liabilities of $14 billion, as well as a possible $327 million budget deficit in the current fiscal year.

“Certainly I am not surprised by the findings of the State’s financial review team," Bing said in a statement Tuesday evening. "My Administration has been saying for the past four years that the City is under financial stress."

Last week, Bing said the city had a financial emergency in his State of the City speech. But he seemed to argue that the city should remain under local control:

"Despite the naysayers‘ predictions, there have not been any payless paydays," he said. "No Emergency Manager to date. And no declaration of bankruptcy for the City of Detroit."

Bing then continued to lay out the cost-cutting measures he had implemented, as well as shouldering some of the blame for the city's fiscal crisis on the state.

"We also need to put into perspective the State's role in our city's deficit over the years," he said during the address. "Since 2001, State revenue sharing to Detroit has been consistently reduced. Last year, we received $93 million less than in 2009, when I took office."

At the end of 2011, Bing said an emergency manager was a possibility that might make sense for the city. But more recently, he argued against one.

"I don't think it's the appropriate decision," he said in December. "I think if an emergency manager comes in here -- what is he or she going to do differently than what we've already done? They will have different kinds of authority, different kinds of support and may be able to get some things done that we have not been able to get done. But the reality is they're going to take the same plan that we have and try to implement that plan."

The financial review team said in their findings that "no satisfactory plan exists to resolve a serious financial problem."

Governor Rick Snyder has a 30-day period to review the team's report, after which, if he agrees, Bing could request a hearing.

The Associated Press reports that if Snyder then decides to appoint an emergency manager, the outcome is unclear:

However, it wasn't immediately clear what effect such a decision would have. A new state law taking effect in just a few weeks gives local governments the chance to choose their own remedy when a review team finds a financial emergency exists. Those communities can request an emergency manager, ask for a mediator, file for bankruptcy or introduce a reform plan with the state.

If Detroit decides it wants a financial manager, that person would be responsible for overseeing all of the city's spending. Bing and the City Council would keep their jobs, but the manager would decide all financial matters. And only the manager would have the power to authorize the city to take the bankruptcy route.

Read Mayor Dave Bing's full response to the review team's findings below.

“Certainly I am not surprised by the findings of the State’s financial review team. 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.

“As I have said before, my Administration will stay focused on the initiatives that most directly impact the citizens of Detroit: public safety, public lighting, transportation, recreation and neighborhood blight removal.”



American Cities Going Broke