State Warns Lawsuit Could Cost Detroit $80M In Revenue Sharing
DETROIT (WWJ/AP) – Detroit Mayor Dave Bing plans to meet with City Council Friday morning, one day after the state Treasurer’s office told the city it is in jeopardy of losing $80 million in revenue sharing — if a lawsuit challenging a consent agreement to fix the city’s finances is not dropped.
Deputy State Treasurer Thomas Saxton has sent a letter to Detroit’s chief financial officer stating a suit filed by the city’s top lawyer, Crystal Crittendon, “threatens to derail” efforts to get Detroit back on fiscal track.
The suit claims the state already owes Detroit $224 million in past revenue sharing — and that under Michigan law the city and state cannot enter into a consent agreement if money is owed by one to the other.
Crittendon said in her lawsuit filed last week that Michigan owes Detroit millions of dollars and that a consent agreement between Gov. Rick Snyder and Mayor Dave Bing is not valid. Saxton said that unless Detroit withdraws the suit, the state aid will be intercepted by a bank to repay the $80 million bond obligation owed by Detroit.
Talking to WWJ Newsradio 950’s Vickie Thomas, Councilman Kwame Kenyatta said Crittendon is charged with upholding the city charterno matter what.
“She must to that or else she’s in violation of the charter, and they don’t seem to respect that,” Kenyatta said. “I think that you go to court — you prove her wrong or your prove her right, and you continue to move on the course of trying to get the finances together and not if you don’t do it our way then we’re gonna punish you.”
The consent agreement headed off the appointment of an emergency manager.
Mayor Bing has said the lawsuit is impeding progress.
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