Snyder addresses his fans and the media during his victory
speech at the Westin Book Cadillac Hotel on Nov. 4, 2010.
– Detroit is in the midst of a fiscal crisis, and
additional actions are needed to address the city's dire problems.
news to Detroiters who are suffering the effects of this crisis,
and it's not news to those watching from afar. But last week,
an independent financial review team issued a report that laid
bare the facts behind Detroit's fiscal emergency.
reviewed that report and agree with the conclusion of the financial
review team. Detroit is, in fact, in the midst of a fiscal emergency
that will likely lead to the appointment of an emergency financial
manager. It's not a decision I make lightly, and I'd like to take
an opportunity to share with you how I arrived at it. Here are
some of the facts that show why action is necessary:
city overestimated its revenues while spending well beyond its
means. In 2011 to 2012, for example, the city initially budgeted
$1.275 billion in revenue, amended its estimates to $1.56 billion,
and wound up taking in only $1.1 billion -- nearly 30% less
than they expected.
The city borrowed
massively to address its deficit and cash flow needs. Between
2005 and 2011, the city borrowed over $600 million to cover its
short-term bills, all while leading to even more long-term problems.
The city's long-term
liabilities have ballooned out of control. As of June 30, 2012,
the city's long-term debt exceeded $8.6 billion, not including
pension liabilities and other post-employment benefits. If those
obligations are added in, the city's total long-term debt is $14.99
billion, depending on whether certain pension system assets are
The city's current
efforts and systems are not sufficient to address its short and
long term challenges. Despite the city's efforts to make reforms,
it is projected to have a cash deficit in excess of $100 million
by June 30, 2013. The review team concluded that the city would
need to increase revenue, or decrease expenditures, or both, by
roughly $15 million per month from January to March 2013 to remain
just about numbers, though. The people of Detroit deserve to have
someone respond when they call 911, to have the lights on in the
streets, to feel safe when they send their kids off to school
in the morning. With the trouble Detroit has had in balancing
its budget, city services have fallen short, and the quality of
life has suffered.
together in partnership, we can more quickly and efficiently reform
the finances in the city and stop the cycle of overspending and
We're seeing great things happen in Detroit with improved schools,
a thriving Midtown, new businesses, and a revitalized riverfront.
But we can't allow a continuing fiscal crisis to stand in the
way of Detroit's reinvention. We need to solve the financial issues
and set a solid foundation for the future so the city can continue
to reinvest in its services and public safety, and begin to grow
Detroit once again.
Bing's Statement Regarding Gov. Snyder's Declaration of a Financial
Emergency in Detroit
Governor has made his decision, and it was his decision alone
to make. While I respect it, I have said all along that I do not
favor an Emergency Manager for the City of Detroit. I will look
at the impact of the Governor’s decision as well as other
options, to determine my next course of action.
needs to be additional conversation with Lansing regarding their
plan to move the City forward. We have always said that we need
help from Lansing to implement our initiatives such as public
safety, transportation, lighting and others. If, in fact, the
appointment of an Emergency Financial Manager both stabilizes
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
firmly believe that Detroit’s best days lie ahead, and my
sole focus has been and will continue to be working to bring about
the great Detroit that we all know can be achieved.”