Michigan governor plans takeover of Detroit

CHICAGO (AFP) - Michigan Governor Rick Snyder prepared for a state takeover of Detroit, a nationwide symbol urban decay, on Friday, by declaring the Motor City in a state of financial emergency.

"Detroit can't wait," Mr Snyder said at a televised town hall meeting. "We need to solve real issues here today because citizens are not getting the services they need and we have a financial crisis."

The move by a white, Republican governor to take control of a predominantly black and Democratic city has drawn intense criticism and charges of racism.

"It's undemocratic and not a solution to the city's problems," Mr John Philo, director of the Sugar Law Center for Economic and Social Justice, which has challenged the emergency management laws in court, told Agence France-Presse.

Detroit needs a partner, not an "overseer," Reverend Wendell Anthony, who heads of the Detroit chapter of civil rights group NAACP, said this week.

Mr Snyder sidestepped a question about the racial implications of his move, but insisted that the appointment of an emergency manager does not mean the end of democracy.

"This shouldn't be about politics," he said, noting that city council and the mayor can participate in the process.

"Let's all keep working together."

Detroit Mayor Dave Bing, who has been widely praised for cleaning up after a succession of corrupt predecessors, said Mr Snyder's plan must include more financial assistance from the state of Michigan.

"We have always said that we need help from Lansing to implement our initiatives such as public safety, transportation, lighting and others," Mr Bing, who has long opposed an emergency manager, said in a statement.

"If, in fact, the appointment of an emergency financial manager both stabilises the city fiscally and supports our restructuring initiatives which improve the quality of life for our citizens, then I think there is a way for us to work together."

Supporters of the takeover say it is the only way to tackle Detroit's seemingly intractable problems.

Emergency managers have the power to eliminate entire departments, change labor contracts, sell city assets and rewrite laws without any public review or input.

Currently in control of four smaller Michigan towns and cities and three school districts, the success rate of such managers is the subject of much debate.

Once the fourth largest city in the United States (US), Detroit has seen its population shrink by more than half from 1.8 million people in 1950 to 713,000 today.

Racial tensions sparked by the civil rights movement - and the devastating 1967 riots - exacerbated white and middle-class flight to the suburbs.

Businesses followed suit, further shrinking the tax base.

With less revenue, the city had to cut back on services, prompting more people to leave.

Then the birthplace of the US auto industry saw its main employers go through round after round of mass layoffs as factories were automated or outsourced and Asian competitors siphoned away market share.

Abandoned skyscrapers, factories and homes litter the landscape. Crime is rampant. The city can't even manage to keep all the streetlights on.

Mr Snyder acknowledged the positive signs seen in Detroit in recent years, like a revitalised riverfront and entertainment district.

But Detroit has been borrowing money for too long to pay its bills. It is rapidly running out of cash to operate and is expected to end the fiscal year US$100 million (S$124 million) in the hole.

More troubling are its long term liabilities, including the cost of pensions and retirement health benefits, which exceed US$14 billion.

The city has 10 days to appeal, but the final decision rests with Mr Snyder.

The emergency manager, who has not yet been named, would be up for review in 18 months.

The governor's office cautioned that an emergency manager won't necessarily be able to stave off bankruptcy and must find the "best solutions to make Detroit financially stable to build for the future."

Mr Snyder bemoaned Detroit's descent from being one of the most prosperous and successful cities in the US to "among the worst".

"We put the country on wheels, we put the world on wheels, we were the arsenal of democracy," Mr Snyder said.

"We can and will develop solutions to fix the city's finances, stop the cycle of overspending and one-time fixes and collectively get Detroit on the path being a great city once again."

Join ST's Telegram channel and get the latest breaking news delivered to you.