CHICAGO — In a closely watched vote, residents of Allen Park, Mich., defeated a bond referendum that would have allowed the struggling Detroit suburb to make debt payments on a controversial failed film studio development.
The rejection will likely spark a state review of the city, which has a $3.2 million deficit, half of which is due to making debt payments on the failed investment project. A state review is the first step in a process that can lead to the appointment of an emergency manager and takeover by the state of Michigan.
The City Council, prompted by widespread criticism of the film studio, has already formally asked the state treasurer for a preliminary review.
Allen Park voters rejected by 60% the tax increase, which would have generated $2.6 million annually. That would have been just enough to cover debt payments on $31 million of limited-tax general obligation bonds Allen Park floated in 2009 and 2010 to finance the film studio and a new government complex located next door to the current City Hall.
The bonds feature a first budget obligation pledge from the general fund, though officials expected to make the payments from lease revenue that has since failed to materialize.
Mayor William Matakas told local reporters he expected state officials to call him Thursday. He said he hopes to stave off state intervention long enough to put the measure on the November ballot. “I think we need another six months to get the voters educated,” he said. Voters rejected a similar proposal last November.
Results were mixed in other bond referendums across Michigan, most of which were for schools. Voters in Grand Rapids rejected one of the largest bond proposals in the state, a $98.6 million measure that would have raised money for Grand Rapids Community College.
Several other large requests were given the green light: a $58.7 million school bond proposal for the Detroit suburb of Bloomfield Hills, a $45.8 million bond proposal for Ann Arbor Schools and an $88.4 million request sought by Brighton Area Schools.
In Wisconsin, primary voters made their choices in the historic recall election of Gov. Scott Walker, a Republican. The incumbent captured 97% of the Republican vote, with more than 626,000 ballots against one challenger. Milwaukee Mayor Tom Barrett easily overcame four challengers in the Democratic primary to capture 58% of the vote, with more than 390,000 ballots cast in his favor.
The contest between the two for the governor’s seat on June 5 marks a rematch of the 2010 race. Organizers of the recall vote, led by organized labor and Democrats, launched the petition drive last November after Walker drew their ire by forcing through legislation that curtailed most local and state union collective-bargaining rights. Senate Democrats left the state in an effort to stall a vote, but it eventually was approved by Republican members who control the Legislature.
In Indiana, the landslide loss of six-term U.S. Sen. Richard Lugar to state Treasurer Richard Mourdock dominated the election, while on the bond side, voters approved six of the seven funding requests that appeared on the ballot. The largest bond proposal, a $119 million issue for Fort Wayne Community Schools, was given the nod, but voters rejected an $88 million bond measure sought by East Allen County Schools.
Voters in Johnson County, south of Indianapolis, rejected a $30 million proposal to build a new library.
