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Detroit Drifts Towards Budget Armageddon

As the city runs out of cash, Detroit leaders are balking at a restructuring deal proposed by state officials to establish a joint advisory board to address the city’s financial troubles without a state-appointed emergency manager.
March 15, 2012, 6am PDT | Jonathan Nettler | @nettsj
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Steven Yaccino reports that a number of city officials, including Mayor Dave Bing, have voiced their opposition to the "cooperative" solution proposed by Michigan state officials, as Detroit moves perilously close to running out of cash.

In an effort to head off the need for a a state-appointed emergency manager, "[t]he agreement proposed Tuesday, which must be signed by the mayor and the review team, would establish a nine-member Financial Advisory Board that would have authority to approve budgets, the sale of assets and changes to contracts, including collective bargaining agreements with the 48 unions that represent city workers," writes Yaccino.

While city leaders acknowledge that drastic measures must be taken to avoid fiscal collapse, they object to the extent to which the city forfeits control in the proposed agreement. "The offer, Mr. Bing said in a statement, 'circumvents the role and power of the City Council as the legislative body, waives the ability of elected officials to contest any aspect of the agreement, and dismisses the unprecedented effort and concessions made by the City's labor unions to avoid an economic catastrophe,'" reports Yaccino.

With a state review team scheduled to deliver recommendations to the governor on a path forward by March 28, the time frame for agreement by city leaders on emergency management measures is quickly closing.

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Published on Tuesday, March 13, 2012 in The New York Times
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