CHICAGO -- Michigan Gov. Rick Snyder April 14 declared a financial emergency in the struggling Detroit suburb of Lincoln Park.
Snyder based his decision on a state-appointed review team's four-month investigation and its April 4 recommendation that the governor declare the financial emergency.
Snyder cited several of the team's findings, including a trend of overspending from the general fund, a decreasing general fund balance and increasing general fund deficit.
Located outside Detroit in Wayne County, Lincoln Park has suffered steep drops in property tax revenues over the past few years. The city has seen its taxable value fall 31% over the last four years, and its general fund revenue decline to $20.3 million in 2013 from $24.6 million in 2009, according to the state.
Property taxes make up 60% of the city's general fund revenue. A state board in January found that the city faces "probable fiscal stress."
Lincoln Park officials now have seven days to request a hearing before the state Treasurer. After the hearing, the governor will either confirm or revoke his determination.
If Snyder confirms his original finding, the city has four options: sign a consent decree with the state; ask for an emergency manager; ask for a neutral evaluation; or seek to file Chapter 9 bankruptcy, with the governor's permission.
The governor in late March declared a fiscal emergency in the Detroit suburb of Royal Oak Township and in Highland Park. The state controls Detroit, Allen Park, Flint, Hamtramck and Pontiac, all located in the Detroit metro area, as well as several school districts.
