In Michigan
6:11 pm
Wed July 8, 2009

Measure would force review of municipal finances

DETROIT, MI – Local governments facing financial hardship could be required to have their books reviewed by the state - under legislation set for introduction in the state House.

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The state can already step in when a city faces financial trouble - as it has with Hamtramck, Highland Park, Flint and now Pontiac.

But State Representative Pete Lund says local governments facing property tax shortfalls and state aid cuts could need some outside help before things get that bad.

"My fear is that if we don't do something proactive now," he says, "we're going to have quite a few more takeovers in the coming years."

Lund says communities that face deficits or have trouble filing financial reports to the state could be targeted for review. But he says the state would not be able to override local decisions, or break labor contracts. That can happen when the state appoints a financial manager for a community.