When a state fails to get a bailout, it needs to get help from Congress
A federal bailout is needed to avert a looming fiscal crisis for Michigan.
The state needs $2.8 billion from the Federal Emergency Management Agency to avert the worst-case scenario for the state’s fiscal health.
If Michigan gets its bailout, Gov.
Rick Snyder will be the first governor in the nation to get it.
Michigan faces a fiscal crisis with $9 billion in unpaid bills and a projected $7 billion deficit.
A report released Thursday by the state Department of Treasury shows that the state has the highest unemployment rate in the country and has the fourth-highest percentage of people unemployed.
The state’s state-run government is struggling to meet obligations to pay pensions and retiree health care benefits.
It also owes nearly $2 billion to the U.S. Treasury.
That’s because of a $1.8-billion pension obligation, which is paid on a quarterly basis.
The governor said that the payments could be delayed due to unforeseen circumstances.
Snyder has repeatedly said he will not seek a second term in the fall.
But the governor has said he’ll try to make a deal with Democrats in Lansing and that he will seek a bailout if necessary.
In the last year, he has said that he plans to propose a bill that would authorize the state to issue $2 million bonds to pay off its pension obligations.
The Republican-controlled legislature would have to approve that proposal.
That bill has been rejected by Democrats.
“The governor should come to the table with the Democrats and talk to them and say, ‘Look, I am not going to run again for governor.
I’m not going for reelection,'” said Rep. Dan Kildee, a Lansing Democrat who chairs the House Appropriations Committee.
Michigan’s debt is expected to balloon to $2 trillion by the end of 2019, according to the nonpartisan Congressional Budget Office.