on December 1, 2009 by in Uncategorized, Comments (0)

Michigan to review another financially stressed city

(Reuters) – Benton Harbor, in southwest Michigan, on Monday joined a growing list of the state’s cities with severe enough financial problems to warrant state intervention.

Governor Jennifer Granholm announced the appointment of a financial review team to determine the severity of Benton Harbor’s fiscal woes.

The team, which includes the state’s treasurer and auditor general, has 60 days to complete a review that could result in the appointment of a financial manager if the city lacks a plan to resolve any serious financial problems.

Benton Harbor, with a population of about 12,800, had a $2.1 million cumulative deficit and $1.5 million operating shortfall in its $9.3 million general fund budget at the end of fiscal 2008, according to Terry Stanton, a spokesman for the state treasurer’s office.

With Michigan’s economy pummeled by the economic recession and the ailing automotive industry, state and local government revenue has dropped.

The state has put financial managers in place in Pontiac, Three Oaks, and Ecorse, while Highland Park has been declared in a financial emergency, but lacks a financial manager, according to Stanton.

River Rouge, like Benton Harbor, is the target of a financial review.

(Reporting by Karen Pierog)