Governor Rick Snyder says a financial emergency exists in Flint.
That determination could lead to the appointment of an emergency manager for the city.
"The State's decision shows how serious our financial challenges are in the City of Flint," Mayor Dayne Walling said in a statement. "Significant progress has been made to stabilize the City's finances during a very difficult economy, but without shared sacrifice across the board the City has not been able to implement all of the necessary cost-savings. When some don't share in the sacrifice, we are all forced to bear the burden. With the support of the people, I will continue serve the City of Flint."
The news comes just a few hours before the polls close in Flint.
Challenger Darryl Buchanan issued an appeal to his supporters to continue voting despite the decision.
A spokeswoman for Governor Snyder says the timing of the announcement had nothing to do with the election. Sara Wurfel says Snyder got the report this morning and reviewed it with the state treasurer before making the decision that an emergency exists.
The city has seven days to request a hearing to challenge the declaration, and if it does, that hearing would take place Nov. 18.
* An earlier version of this story incorrectly stated that there are seven candidates in the mayor's race. There are only two - Walling and Buchanan.