Royal Oak Township

Michigan State University

The latest Michigan community to fall into financial collapse is the tiny half-square mile community of Royal Oak Township, in Oakland County.

Late last month, Gov. Rick Snyder confirmed a financial emergency existed in Royal Oak Township. That cleared the way for action under Michigan's overhauled emergency manager act, PA 436.

What's happened in Royal Oak Township illustrates the changes and options available under PA 436 after voters rejected the previous emergency manager law in November 2012. We wondered if other communities can learn cautionary lessons from the financial troubles of Royal Oak Township.

Eric Scorsone, municipal finance expert from Michigan State University, joined us today.

Listen to the full interview above.

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And, last month, Gov. Snyder confirmed a financial emergency existed in Royal Oak Township. Can other communities learn from Royal Oak’s situation?

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In This Week in Michigan Politics, Jack Lessenberry and Christina Shockley discuss the financial emergency in Royal Oak Township, the approval of PTSD for medical marijuana use, and how Michigan Attorney General Bill Schuette is going after energy companies accused of drastically bringing down the prices of oil and gas land leases, and why some people paid as much as $8 a gallon for propane this year.

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Now that Gov. Rick Synder has confirmed that a “financial emergency” exists in the Detroit suburb, Royal Oak Township officials have seven days to decide how to move forward.

Under the state’s emergency manager law, known as the Local Financial Stability and Choice Act, there are four options the township can choose:

  • a consent agreement,
  • an emergency manager,
  • neutral evaluation,
  • or Chapter 9 bankruptcy

From the governor’s office:

On January 30th, Governor Snyder determined that a financial emergency exists in Royal Oak Township after reviewing a report from an independent financial review team. Following a hearing township officials requested, as allowed under PA 436, State Treasurer Kevin Clinton recommended that the governor confirm his determination of a financial emergency.

State officials say the township board has until 5 p.m. on Wed., March 26  to make a choice on how to move forward.

Steve Carmody/Michigan Radio

LANSING, Mich. (AP) - Review teams have found financial emergencies in two more Michigan communities.

The state treasurer's office says Governor Rick Snyder has 10 days to make a decision on the financial conditions of Royal Oak Township in Oakland County and Highland Park, near Detroit.

The reviews are part of a process that could lead to the appointment of emergency managers.

Steve Carmody/Michigan Radio)

Cities across Michigan are closely watching what happens to Detroit in bankruptcy court this week.

More than a dozen Michigan cities and school districts are currently under some form of state oversight.