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What does Wayne County's fiscal crisis mean for the rest of the state?

Jul 16, 2015

Credit User: penywise / MorgueFile

The city of Detroit emerged from the largest municipal bankruptcy in U.S. history last year. Now, Wayne County, where Detroit is located, finds itself facing about a $50 million structural deficit and unfunded pension liability estimated at $850 to $940 million.

Wayne County Executive Warren Evans has asked the state to declare a financial emergency in the county. He's also proposed an aggressive deficit elimination plan. Meanwhile, a state review team says the county is in probable fiscal distress.

Jennifer White spoke with Susan Demas, publisher of Inside Michigan Politics, and Ken Sikkema, former Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants, about the economic and political implications of Wayne County's fiscal troubles.

Demas says the impact of Wayne County's financial trouble on the rest of the state is significant. The county is a major hub for industry and home to Detroit Metro Airport. She says a lack of trust in Wayne County's financial security could affect job growth.

Sikkema says despite these concerns, he thinks it's unlikely that state lawmakers will step in to help Wayne County financially. He thinks they'll be reluctant to set a precedent for other counties that are also struggling with pension and retiree health care costs. 

Here's their conversation.