Snyder Backs Review Panel, Declares Financial Emergency

Gov. Rick Snyder has sided with an independent review board, declaring Wednesday that a financial emergency exists in Wayne County.

“Local leaders have taken important steps toward resolving the financial crisis that has challenged the county for several years, but the review team’s report clearly shows that a financial emergency exists,” Snyder said in a statement.

“Chronic financial crises will only grow worse, and the possible solutions will be far more difficult, if the crisis is not addressed immediately,” the statement continued. “Restoring Wayne County to a secure financial foundation will ensure residents will continue to get the services they need.”

Michigan’s largest county is wrestling with a $52 million structural deficit, stemming in part from a substantially underfunded pension system and dwindling tax revenues, down about$100 million annually since 2008. The county’s estimated accumulated deficit is $150 million.

Related:

• Review Panel: Financial Emergency Exists in Wayne County
• Wayne County Exec Seeks Financial Emergency Declaration
• State Responds to Request for Wayne County Financial Emergency
• It’s Not Good’: Wayne County’s Financial Hole Deeper than Thought
• Wayne County Executive Orders Spending Freeze

Wayne County Executive Warren Evans, who asked for the emergency declaration, said in a statement that the next step is to seek a consent agreement that will give his office and county commissioners needed “tools to focus our efforts on reducing the $52 million structural deficit.”

In particular, it gives the county executive the latitude he needs to impose $230 million benefit cuts over four years, a key component in his recovery plan.

The consent agreement, which establishes benchmarks the county would have to reach, isn’t automatic. Other options for state intervention that county commissioners could consider include mediation, appointment of an emergency manager or Chapter 9 bankruptcy.

Evans told the Detroit City Council Tuesday he doesn’t think the county will have to resort to drastic steps such as emergency management or bankruptcy.

“We’re working very hard to get this budget situation straightened out,” Evans told council members Tuesday morning. “There is no way I would foresee Wayne County needing an emergency manager or bankruptcy at this point.”

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Photo of Gov. Rick Snyder by Bill Pugliano / Getty Images / AFP