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Governor declares financial emergency in Detroit

detroitfinance12.jpg

Oct. 24, 2012: This photo shows a graffiti-marked abandoned home north of downtown Detroit. (AP)

Gov. Rick Snyder said Friday he has declared a financial emergency in Detroit, a determination that could lead to the appointment of an emergency manager over the city's finances.

Snyder told The Associated Press that his decision on whether to appoint an emergency manager will come after the city's 10-day appeals process. He said Mayor Dave Bing's office already has been notified of a March 12 hearing date.

Snyder said he already has a candidate in mind for the emergency manager position, but declined Friday to released details about that person.

The move was all but guaranteed after a review team reported to Snyder on Feb. 19 that Detroit was in a financial emergency and needed the state's help to emerge from it. A review team first looked into Detroit's books in December 2011, but stopped short of declaring a financial emergency.

The second team began to pore over the city's financial records this past December.

Detroit faces a $327 million budget deficit, more than $14 billion in long-term debt and persistent cash flow issues.

Bing said Thursday he has believed since taking office in 2009 that some kind of outside help is needed to address the city's finances.

"I'm more interested, instead of fighting Lansing, in working with them," the first-term mayor said.

Emergency managers have the power under state law to develop financial plans, renegotiate labor contracts, revise and approve budgets to help control spending, sell off city assets not restricted by charter and suspend the salaries of elected officials.