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Detroit — The man charged with fixing Detroit's faltering finances has been hit with four liens in four years from the state of Maryland for unpaid taxes, records show.
State records show Kevyn D. Orr, who was appointed emergency manager on Thursday, has two outstanding liens on his $1 million home in Chevy Chase, Md., for $16,000 in unemployment taxes in 2010 and 2011. Two other liens of more than $16,000 in unemployment and income taxes were satisfied in 2010 and 2011, records show.
Critics of the emergency manager said the liens are troubling, since Orr is tasked with improving tax collections. The Detroit News reported last month that only 53 percent of homeowners paid property taxes last year, leaving $246.5 million uncollected for Detroit and other governments. City records estimate that, in 2011, Detroit collected $32 million less in income taxes than it was owed.
"It's quite interesting that he feels he could manage the city of Detroit and he's having trouble managing his own affairs," said the Rev. Charles E. Williams II, president of the National Action Network of Michigan that is fighting the appointment.
The distressed US city – once one of the nation's most prosperous manufacturing centres – is now the largest US city to have its finances placed under state control.
Governor Rick Snyder announced on Thursday that he had chosen Kevyn Orr, a partner in the Cleveland-based law firm of Jones Day, to be Detroit's emergency manager, a position that gives him broad powers to control all spending. The move makes Detroit the largest city in the US to have its finances placed under state control.
The state's emergency loan board approved Orr 3-0 later Thursday on what Snyder called Orr's ability to work with people cooperatively, great technical skills and a record of tough decision making. Under state law, the Local Emergency Financial Assistance Loan Board officially hires the emergency manager and sets a salary. Orr will make $275,000 a year.
In the early 20th century, Detroit was the country's fourth most populous city behind New York, Chicago and Philadelphia. It had nearly 2 million residents in 1950 and now has shrunk to 700,000 and 18th in rank. A declining tax base; nearly 2 in 5 residents living in poverty; and a former, now convicted, mayor who spent lavishly have taken their tolls on the city's finances.
Detroit’s new Emergency Financial Manager Kevyn Orr, who was appointed Thursday by Michigan’s Republican Gov. Rick Snyder, faces a daunting financial clean-up: $327 million in budget deficits to balance, $14 billion in long-term liabilities to resolve, and an 18.2% unemployment rate to lower. And he has 18 months to do it.
“Customers”–not constituents. Orr is one of several emergency managers (EMs) who have been appointed–not elected–in cities and school districts across the state of Michigan, and who have the power to overrule local
governments. Critics contest that past EMs in the state have used their unchecked powers to circumvent the democratic process and effectively steamroll elected city council officials.