Other cities placed under state financial control

AP News
Posted: Jan 11, 2013 12:52 PM

If Michigan Gov. Rick Snyder concludes that Detroit cannot fix its own financial problems, the city would become the sixth in the state to get an emergency manager. Benton Harbor, Flint, Pontiac, Ecorse and Allen Park currently have emergency financial managers.

A look at other U.S. cities that are, or have been, under state control:

— Harrisburg, the Pennsylvania capital, has been under state oversight since 2011. The Republican-controlled Legislature had been trying to force the city to pay down a $300 million debt tied to a trash incinerator renovation project. Mayor Linda Thompson has called her proposed $54.3 million budget for 2013 "bare-boned."

— Atlantic City let New Jersey take over its finances in 2010. The arrangement allows the city to spread its $9.5 million budget deficit over five years, sparing residents and businesses a significantly larger property tax increase. State supervision also allows the city to defer some expenses.

— Camden, N.J., spent seven years under state control beginning in 2002, but problems have persisted. Two years ago, about half of the city's police department and a third of its firefighters were laid off to save money. Since then, all the laid-off public-safety workers have been called back, but their numbers have fallen through attrition.

— Massachusetts put the city of Chelsea under state receivership in 1991 due to chronic money problems and more than $9 million in debt. The mayor was removed from office and a state-appointed receiver put in his place. The receiver was able to rip up and redo union contracts, impose new fees and change zoning regulations. By 1993, Chelsea had a budget surplus.

— State legislators in New York created the Municipal Assistance Corp. in 1975 to rescue New York City from imminent bankruptcy. The MAC board took over the city's finances and was able to borrow billions of dollars on its behalf. The MAC kept the city solvent and was disbanded in 2008.