Heading down a path that could lead to the state of Michigan taking over the running of Detroit, Gov. Rick Snyder on Tuesday appointed a team to review the city's finances.
The team was named after a preliminary review of city finances showed "probable financial stress" after Detroit was unable to tackle its mounting deficits.
The team, which includes State Treasurer Andy Dillon and other local officials, has 60 days to complete its work. The formal review was announced last week.
The appointments are the next step in the review process, which is driven by expectations that Detroit will run out of cash by April.
"Given urgent and time-sensitive financial issues facing Detroit and the need to ensure critical services continue to be provided to city residents, the next step simply necessitates the appointment of a financial review team," Snyder said in a statement.
The formal review could have various results. If a financial emergency is declared to exist, the governor would have to decide on an emergency manager. But if the stress levels are considered mild, the current city management could carry on.
Detroit Mayor Dave Bing has said he will cooperate with the review process but says his budgets are the remedy to the city's financial crisis.
Last Thursday, the Rev. Jesse Jackson and U.S. Rep. John Conyers, D-Mich., joined religious and civil rights leaders to promise protests and possible civil disobedience against Michigan's new emergency manager law that could lead to a takeover of Detroit government.
"We are prepared to go from education, mobilization, litigation, legislation, demonstration and civil disobedience," Jackson said as he and others held a news conference at Detroit's Bethany Baptist Church.
"We want a positive commitment to restoring democracy and economic justice for all citizens." Jackson said.
Snyder has called for Bing and Detroit's City Council to come up with their own financial rescue plan so Michigan can stay out of the city's business.
But Snyder has also highlighted what he said was the seriousness of the city's money problems, citing Bing's statement that Detroit could run use up its available cash in April.
"We can't let the city run out of money," Snyder said. Besides Detroit's cash-flow problem is a long-term structural deficit that needs a fundamental solution, he said. "Detroit's been in a financial crisis of some kind for decades."
The Detroit Public Schools and the cities of Flint, Pontiac and Benton Harbor already have state-appointed emergency financial managers.
Michigan recently enacted a law expanding the state's power to push aside elected local government and school officials whose agencies get in financial trouble.
Conyers said the expanded law is "seriously flawed" and said it unfairly targets communities with large numbers of minority group members.
Jackson, a Chicago-based activist, said emergency managers are like dictators with the power to override local democracy, discard union contracts and cut vital public services. He said he is seeking U.S. Justice Department intervention.
Detroit, with a population of 714,000, has faced hard times with auto industry contraction and falling revenue. More than 36 percent of its residents are below the poverty line, according to the Census Bureau.
The city was once one of the most populated in the United States. But it lost 25 percent of its residents between 2000 and 2010, the fastest decline for any municipality with more than 100,000 residents besides New Orleans.