In November 2012, Michigan voted to repeal the existing emergency manager law; despite this fact, Michigan’s legislature jammed through a new bill to replace the old emergency manager legislation during the lame-duck session in December 2012.
According to reports by Huffington Post, Governor Rick Snyder is still considering the facts from a report done by a state-appointed review team to see if Detroit is, in fact, in a state of financial emergency.
During a one-on-one session with Snyder, The Associated Press asked if any of the potential candidates for the job had already declined it.
“Oh yeah. There were quite a few people who were in that camp,” Snyder said. “Because if you think about it, and this is not to imply we’re going to do one, but it would be an extremely challenging position.”
Challenging may not be the best way to describe such a task.
The review team’s report also found the city would have had to increase revenues or decrease spending by about $15 million per month from January to March in order to “remain financially viable.”
Snyder believes the way to solve this problem is with an emergency manager. While desperate times may call for desperate measures, many agree this law is not the way to do it.
Under the law, the appointed emergency manager would be in charge of all the financial affairs of Detroit. The emergency manager would also have the jurisdiction to declare bankruptcy for the city. Snyder now has 30 days to decide if Detroit is in fact in a financial emergency.
A report from the secretary of state claimed eight cities and schools in Michigan are currently under the control of emergency (financial) managers. That means eight locally elected governments have been dismissed and handed over to state-appointed officials.
This is destroying democracy. This law takes away our right as citizens to elect our own government. It undermines your right to vote. You may argue that with our vote, we should have voted for a different governor, but many agree that our governor has gone too far with this legislation.
Former Governor John Engler was actually the first governor to appoint emergency managers in Michigan. Engler sent emergency financial managers to the Michigan cities of Hamtramck, Flint and Highland Park to try and prevent them from going bankrupt. Eventually they did help these cities avoid financial disaster, but it took more than seven years.
Deficits and financial emergencies are not something that can be fixed overnight. Putting someone Michiganders don’t trust into a major role is not going to help. These emergency managers should not be able to take over a city’s local government: they should not be taking over Detroit.
Detroit has financial troubles for many reasons, such the massive population loss from 1.8 million citizens in the 1950s to just over 700,000 according to the 2010 United States census.
“We need to grow the city of Detroit,” Snyder said. “That’s the answer here and it’s going to be really hard. I want to make sure people understand how difficult this is going to be.”
The place to go for answers is job creation. Michigan needs major renovations to its economy, and Michiganders need employment to spur the growth of Michigan’s economy.
Emergency managers are a Band-Aid for a larger problem. Detroit can be great again, but the city won’t get there by solving its budget issues alone. Detroit will get there by way of hard work, investment, smart governing and leadership from Lansing.
3 Comments
I see you mention that “Detroit has financial troubles for many reasons, such the massive population loss from 1.8 million citizens in the 1950s to just over 700,000 according to the 2010 United States census.” but you neglect to mention the hundreds of millions of dollars that have been repeatedly wasted by past administrations (Young and Kwame), the stubbornness of the City Council to make the right decisions (see Belle Isle), and the enormous excess of public personnel in the city. There are still Kwame appointments in their positions to this day that are fully salaried and invested in the pension plan with no question of their right to be there.
The EFM law isn’t pretty by any means but neither is the situation Detroit is facing. Labor unions, an obstinate city council, and crushing problems are sinking what could be a great city and there isn’t anyway to get past it except cutting through the local democracy. Mayor Bing could have been the answer but no one was willing to cooperate with him and transform the city. Now the changes are probably going to be forced through.
Let’s think about this for a second though. The separation between city and state is much different then the federalism experienced at a national level. There are very few protective barriers for municipal government and even fewer when said municipality isn’t financially solvent. The state has a responsibility and duty to fix the local governments mistakes and in this case that has been held off too long as it is.
You say “Detroit will get there by way of hard work, investment, smart governing and leadership from Lansing” but most of that is just buzzwords that people use to make themselves feel good.
Hard work? With what funding? You have to pay the thinkers and leaders of tomorrow to come to your city. A city can’t subside on an art community.
Investment? Who really wants to invest in a city that can’t maintain a real budget and can’t get it’s act together after 40 years? City taxes are high and city services are disproportionately low. The property value of half the city area is practically a negative investment once environmental clean up, back taxes, and city taxes are compared to the value of the investment (protip: that $500 house isn’t really $500.) Yes you get outliers like Quicken Loans that are willing to invest but those opportunities are few and far between. This is what Michigan’s economy is now. It’s never going to be an economic powerhouse again and the auto industry isn’t a savior. Deal with what you have and don’t expect a rain of gold coins from the sky to fix your problems.
Leadership from Lansing? You just wrote a whole article AGAINST leadership from Lansing! Lansing has been holding Detroit hand and coddling them the best they could. They just offered to take a 40 year lease on Belle Isle and put a huge investment into it. The city council rebuffs or wastes every opportunity given to them. Bing and Snyder have tried over and over again to work together but without any support from the city. We’re lucky that the idiot electorate in Detroit managed to elect someone competent but that opportunity was squandered like every other one.
So what are you really saying? You want the community of Detroit to charge and fix their city. You want the people to make their city worth investment again and you want them to it themselves. I hate to break it to you but the people put themselves in this situation. How long can debt drag on? How long can a city fight tooth and nail with it’s own employees to make changes? How does this revitalization even get started? The EFM will lay groundwork for change and he’ll make the beginning steps towards a new Detroit. It’s going to be up to the city to take charge from there. You’ll get your control over the city back when the budget is in a reasonable place, when the city sheds some of it’s overbearing 150 sq mile area, and when it has a plan for the future that’s realistic.
Looks like Sean has a much better grasp of the situation than the editorial writer.
Perhaps the worst thing about emergency management by a state receiver is what it doesn’t do.
There is nothing in the law to help municipalities anticipate consequences of the sort of large-scale economic changes that gutted the tax bases of cities like Flint, Pontiac, Detroit, Muskegon, and Benton Harbor. Once their tax bases have been virtually eliminated, there is nothing in the law that provides them with enough funding to ensure adequate basic services to their citizens. As a result, an emergency manager has no ability to fundamentally improve a city’s revenue stream.
Despite the fact that managing money (when their isn’t enough money in the first place) takes MORE expertise than managing relative wealth, there is nothing in the law that builds the management expertise of local officials.
An emergency manager CAN protect bondholders, privatize services, sell public assets and further
a corporate-oriented agenda while being protected from any interference by residents or their representatives.
In short, this law–like its predecessors–can do nothing to actually restore the economic health or ability of municipalities to provide adequate services because it totally ignores the real reasons for their distress.