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"Financial emergency" declared in yet another Michigan city

A state review team has officially concluded that a “financial emergency” exists in the city of Lincoln Park.

The small suburb in the downriver area just south of Detroit is running a slight deficit right now, despite having a $4.5 million general fund balance in 2010.

According to the review team’s findings, city officials estimate that deficit will grow by at least $1 million by the middle of this year—more if the city can’t get concessions from its police unions.

Governor Snyder has 10 days to confirm the review team’s findings.

If he does, as expected, the state could take one of several paths to deal with Lincoln Park’s situation, including appointing an emergency manager.

"It's what we were waiting for," Mayor Tom Karnestold the Southgate News Herald. "You can't take steps until you know what you're facing. We have to be positive. It is what it is.”

Like many other Michigan cities, Lincoln Park has faced a combination of population loss, declining tax receipts, andreduced state revenue sharing in recent years.

The city is poised to become the tenth Michigan municipality under some kind of state control. State review teams are assessing the finances of two others.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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