Detroit Cuts Deal to Avoid State Takeover

Just 24 hours before Governor Snyder's deadline for appointing an emergency manager for Detroit to help rein in its budgetary troubles, the city council has voted to approve a consent agreement with the State of Michigan.

Matt Helms and Kathleen Gray report on the slim 5-4 vote, which came after weeks of meetings, rallies, and court hearings, to approve management of the city's finances by a "financial advisory board whose members would be appointed by Gov. Rick Snyder, Mayor Dave Bing and the City Council would advise and review all budget matters and grant approval of union contracts."

The agreement was seen by many supporters as the best of the unappetizing options available as, "Detroit is sinking under the weight of crushing debt, including long-term obligations of more than $12 billion from pension and benefits. The city also has had to contend with a population loss of 250,000 in the last 10 years, contributing to the rapid decline of property tax revenue and an explosion of abandoned homes."

As opposed to the threat of emergency management, which "could strip city leaders of virtually all of their control," the consent agreement allows for the continued involvement of the mayor and council in decisions about the city's business.

Still, not all were happy with the results of the narrow vote. According to Helms and Gray, the vote "came after two hours of impassioned pleas from Detroiters who wanted the council to reject the consent agreement...some angry residents accused city leaders of turning their backs on the city's legacy of unionism and its place as a majority black-run city."

"The major sticking point under a consent agreement is the reopening of union contracts."

Full Story: Detroit's new deal with state lifts threat of manager, for now

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