Economy
10:51 am
Wed May 25, 2011

Snyder signs legislation backing up plan to pay Ecorse's debt with bonds

As Micawber said in the Charles Dickens novel David Copperfield:

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

The city of Ecorse ran into misery when it spent more than it was taking in.

An emergency manager appointed to oversee Ecorse's finances in late 2009 found the city was overspending. To make up for the overspending the city spent $2.4 million in revenues collected from the Ecorse Public Schools, and $4.2 million collected on behalf of Wayne County.

In 2010, a judge told the city that the money had to be repaid - a prospect that would have forced the city to raise taxes significantly and "devastated the local economy," according to Governor Snyder's office.

Now, Governor Snyder has signed legislation which supports the city in its plan to sell bonds to pay off the debt overtime.

In a press release, the Governor said:

“Ecorse didn’t get into financial trouble overnight.  Trying to undo years of mismanagement in one fell swoop would create an overwhelming burden on city residents and businesses that are already struggling,” Snyder said.  “The goal is to get Ecorse back into financial health in a responsible way.”

The Governor's office said the city could have issued bonds without state approval, but the new legislation "gives greater assurance of repayment to those who will purchase Ecorse’s bond debt."