(Reuters) - Wayne County, Michigan, home to Detroit, has eliminated its budget deficit and met other conditions allowing it to be released from state oversight, state and county officials said on Thursday.


Michigan Governor Rick Snyder declared a financial emergency for the county in July 2015, citing a series of unbalanced budgets and growing employee health care liabilities.


The county opted to enter into a consent agreement with the state that plotted its path to fiscal health, including the elimination of a $52 million structural deficit.


Wayne County Executive Warren Evans said his administration was also able to ease unfunded health care obligations and raise the funded level for pensions to 54 percent from 45 percent. The consent agreement allowed the county to negotiate new collective bargaining agreements with most of its unions, he added.


"It was the necessary means to get our fiscal house in order so we could tackle the remaining challenges," Evans said. "We’ve made tremendous progress, but exiting the consent agreement only positions us at the starting line to get where we need to go as a county.”


Michigan Treasurer Nick Khouri said the county made significant progress.

“This process is a great example of how the state and local government can work together to improve the financial health of municipalities,” Khouri said.

Under Michigan law, the county was able to choose between a consent agreement, emergency manager, neutral evaluation, or Chapter 9 municipal bankruptcy to deal with its fiscal woes.

Changes to the law were recommended in a bipartisan Michigan legislative report released on Wednesday concerning the lead-tainted water crisis that occurred in Flint, Michigan, which was being run by state-appointed emergency managers.

Lawmakers suggested a three-person management team instead of a single emergency manager among other proposals.

Detroit's emergency manager had filed the biggest-ever U.S. municipal bankruptcy, which the city exited in December 2014.

(Reporting by Karen Pierog in Chicago; Editing by Jeffrey Benkoe)