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Auto Town on Path to Takeover by State

The state of Michigan is getting ready to institute an emergency manager to effectively take over the financial operations of the auto industry city of Pontiac, which has struggled economically for more than a decade.
March 7, 2009, 7am PST | Nate Berg
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"...Pontiac, with its population of 70,000, 2008 annual budget of $52 million and an outsize accumulated budget deficit of $12 million. Gov. Jennifer M. Granholm has previously stated that the city is in economic crisis, and at a hearing in Lansing on Wednesday she allowed the city to present its case."

"She is likely to appoint an emergency manager to take over the municipal finances in the next several days. Pontiac would be Michigan's fifth city in 20 years to undergo a state take-over. Flint had an emergency manager for two years, ending in 2004. Two other municipalities have them now - Highland Park and Three Oaks - three would be more than the state has ever had at one time, yet another signal of how entrenched Michigan's long recession has become."

"As G.M. shed more than 3,000 jobs in Pontiac over the last two years, it compounded more than a decade's worth of job and population loss."

"'The mayor's office and the City Council have exhibited an ongoing inability to resolve the city's budget issues,' Ms. Granholm said last week in a letter to the mayor, Clarence E. Phillips."

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Published on Thursday, March 5, 2009 in The New York Times
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