Lincoln Park joins growing list of cities in financial emergency

Apr 15, 2014

Lincoln Park had $4.5 million dollars in its general fund three years ago.

Today, the city has a deficit of nearly $90,000, raising alarm among state officials about how fast it has spent all its money.

Gov. Rick Snyder says he agrees with the Michigan Treasury that a state of financial emergency exists.

Lincoln Park officials say the city is on track to run up at least a $1 million deficit this year. The amount will be higher if the city can't strike a deal on concessions from city workers.

Lincoln Park has seven days to ask for a hearing to contest the state's finding.

If the declaration is upheld, Lincoln Park can choose from several options under the state's new financial emergency law, including a consent agreement or an emergency manager. The other two options are to reach a cost-cutting agreement with all stakeholders with the help of a "neutral evaluator" – or Chapter 9 bankruptcy. 

But any city wishing to file for bankruptcy would need the approval of the governor.

Six other cities are in a state-declared financial emergency:  Detroit, Allen Park, Benton Harbor, Ecorse, Hamtramck, and Royal Oak Township. 

Highland Park may be next to join the list.