Rick Snyder defends Michigan's emergency manager law

"A number of our cities and schools are suffering major financial distress," he said. "This problem is not a new one, but it's an important topic we should fully address in 2012."

When he came into office, Snyder said, the state had six cities or school districts under emergency financial management. Last year, one more joined the list and it appears Detroit could be next.

The overriding common feature among communities with an emergency manger, Snyder said, is they've lost population without a corresponding right-sizing of their cost structure.

"Tonight, I want any jurisdiction that's struggling with its finances to know we are committed at the state level to be a supportive partner to help you resolve your challenges," Snyder said, turning to recognize Detroit Mayor Dave Bing after making that remark.

The long-term answer is not simply about cutting costs, Snyder said, but how to create a financially solid foundation so that growth can occur again.

"Detroit has many exciting developments going on, and resolving the city's financial challenges would clear a path to a bright future," he said.

Snyder explained the use of an emergency manager is intended to quickly and effectively solve financial problems so a community can get back on a positive path.

"Some people may wonder what we're talking about when the term 'financial emergency' is used," he said. "Think about a situation where employees are not going to get their paychecks, suppliers are not getting paid, bond payments are being missed, or financial statements cannot be completed. These are critical problems."

Snyder also promised Wednesday night to continue to work on regulatory reinvention in 2012 by continuing to rescinded obsolete, confusing and burdensome regulations.

"This year we're going to continue our regulatory reinvention by eliminating rules that simply don't make sense," he said, sharing three examples that drew laughs from the crowd.

"First, we have a rule mandating the size of a barber's wastebasket and how many times it must be emptied. I just got a haircut and my barber wasn't aware of this particular rule.

"Second, we have a rule requiring child care providers to smile," he said. "Finally, and this shouldn't be surprising … but the Department of Environmental Quality has 28 separate requirements for outhouses, including a requirement that the seat not be left up. I don't know about you, but I have a higher authority at home. I don't need the state telling me that."