As of May 2012, there are four cities with appointed Emergency Managers (Pontiac, Ecorse, Benton Harbor, and Flint) and three cities with active consent agreements (River Rouge, Inkster, and Detroit.) This study looks at several factors that may separate these seven cities from other cities in Michigan that are in fiscal stress. The purpose of this study is to find out how well the Emergency Manager Law has been applied to fiscally stressed cities in Michigan and what common factors are shared by the cities that have gone through the process. The study is intended to fact check some of the arguments on both sides of the debate and yield some truth about how the Laws affect certain cities over others.
As cities around the country show more signs of fiscal distress from years of economic downturn, and municipal bankruptcies become more common, Michiganders are paying much greater attention to our state’s policies for dealing with municipal fiscal stress. The extreme case of a local financial emergency in which an Emergency Manager is appointed to take over a city has been widely debated this year after the passage of Public Act 4 in March. However, it is important to recognize the history of state intervention in municipal fiscal stress in this country and in this state.
Governor-elect Rick Snyder ran a campaign that included as one of its primary components a strong urban agenda. Now that he will be assuming the state's highest office come January, he will have a chance to make good on his promise to restore Michigan's urban core-namely the city of Detroit. As Snyder proclaimed during the campaign, "Michigan cannot be a great state until Detroit is on the path to being a great city."
With the state House’s recent approval of an 11% cut in municipal revenue sharing for the coming fiscal year, Michigan municipalities began bracing for a sizeable blow to their budgets. Facing some of the more drastic cuts in the state are its urban core cities, which face cuts from the hundreds of thousands to several millions of dollars.
Detroit's night shift may find it harder to get to and from work on the city's buses as the city gets ready to cut late night and early morning service from almost 40 routes.
Governor's Dilemma: The Detroit Financial Crisis
Written by Shay Shahid
Tuesday, 26 February 2013 20:23
Since the beginning of 2013, Detroit has been under media scrutiny more than normal due to its increasing unstable financial situation. Recently, the city's largest union (AFSCME -American Federation of State, County and Municipal Employees) filed a lawsuit against Mayor Bing's administration alleging "unfair labor practices" of furloughs on its 600 unionized employees. However, it is the six-member Financial Review Team's unanimously prepared report that has sent jitters through the Michigan's largest City Hall. The likelihood of Governor Snyder appointing an emergency Financial Manager has increased substantially.
On Election Day, voters in Michigan successfully repealed Public Act 4 by voting "No" on Proposal 1. This caused confusion over whether or not this meant Public Act 72 (the original form of the Act) was also repealed. In the end however, it looks like the decision has been made that Public Act 72 has returned. Michigan's Attorney General Bill Schuette wrote an opinion saying that should Public Act 4 be repealed, Public Act 72 would take its place. However, this decision could be opened up to legal challenges. Both the Flint City Council and the Sugar Law Center in Detroit have issued lawsuits arguing that Public Act 4 and Public Act 72 were one in the same and thus both should be repealed.
In examining the effectiveness of Michigan's Emergency Financial Manager Law, one city to look at in detail is Pontiac. On March 19, 2009, the Local Emergency Financial Assistance Loan Board appointed Fred Leeb as the EFM (Emergency Financial Manager). Then in 2011, Rick Snyder appointed Louis Schimmel to be the new EM under Public Act 4, Snyder's revised version of the law.
When Public Act 4 was put up for referendum in August of this year, the Board appointed Schimmel as EFM under the original law. However, the city council sought to remove the position of EFM, believing that the referendum suspended both the old and new form of the law (as reported by MLive). The six member council voted unanimously to remove Schimmel, but Pontiac Mayor Leon Jukowski vetoed their measure. Jukowski had long advocated for an EFM and was disappointed by the council's special meeting, saying that "it's going to demonstrate to the governor's office that we're completely incapable of governing ourselves...the City Council has acted in an unlawful manner, in my opinion". This tension between the council and the mayor (who serves as an advisor to the EFM) has been noticed by residents of the city, who feel that the EFM diminishes their participation and involvement in the decision-making process.
The decisions that the EFM have made during the past few years have had a large impact on Pontiac. An Emergency Manager Report released on December 31st, 2011 details the initiatives and policies implemented by Schimmel in his first three months on the job. One of these policies was to shift responsibility for firefighting services to the Charter Township of Waterford, which saves three million dollars a year (according to the manager's report). A press release from the Michigan Township Association describes the move as a success, saying that "This is a new era in the state where more townships are providing services to cities. It shows great fiscal responsibility by both units of government"(as quoted in the Waterford Township release). Measures such as this one show why having an Emergency Manager can be a good thing, because without his authority in getting something like this done, it might not have happened so quickly or effectively. The fact that it was able to come to pass in such a short timeframe and with such support from both fire unions shows is a great example of how the community can get behind an EM's plan and stories like this are the reason why the EM law was created. Where problems come up, however, is when the expansive powers of the Emergency Manager interfere with policies that the council feels strongly about, as Schimmel made "dramatic moves to balance the city budget" without the council's approval, according to the Detroit Free Press. They believe that this violates the democratic process, as they were elected to do a job that they no longer have the authority to do.
This coming election, voters in Michigan will have the chance to decide the fate of an important law that has affected the lives of many of the state's residents. This is an important part of the democratic process and its use here gives a substantial amount of power to the voters. Michigan's Emergency Manager Law, Public Act 4, is up for a referendum on the November 6th ballot this year. Public Act 4 allows the Governor to appoint an Emergency Manager to take over local governments in times of financial distress. This controversial law allows Emergency Managers to, among other things, disband unions and privatize prisons.
Who is Next? Emergency Managers and Local Government Fiscal Stress
Written by Evan Gross
Saturday, 12 May 2012 11:41
There are two court cases this week that are being closely watched by policymakers and citizens on both sides of the Emergency Manager debate. As the Emergency Management program continues with Muskegon Heights School District getting an Emergency Manager and the Pontiac School District starting the process with a preliminary review, a basic premise of the law is being tested. The argument being presented to the State Appeals Court is that the Treasury's Review Teams, which have gone into fiscally stressed cities and investigated deficits, finances, and operations without public oversight and in many cases recommended the use of an emergency manager, violate the Open Meetings Act. The Open Meeting Act broadly applies to all commissions, councils, or other decision making groups that operate under the authority of state or local government, and prohibits such groups from meeting in secret in most cases. In the court cases, the State has argued that the Review Teams play only an advisory role, and do not make any final decisions, only "recommending" different courses of action. However, the lawsuit brought by Highland Park School Board Member Robert Davis alleges that Review Teams, which have been used for over a decade in Michigan, serve more than an advisory role, and have decision making authority under the Emergency Manager Law that would subject it to Open Meetings Act provisions. The governor, after all, cannot appoint an emergency manager without the Review Team's determination, and the Review Teams have the power to work out (or not work out) binding consent agreements with local units. These determinations can have serious effects on local units and citizens from operational changes to losing local control completely. The case is currently in the appeals process after a circuit court judge ruled that Review Teams must comply with the Act and meet publically.
The Michigan Policy Network is a student-led public education and research program to report and organize news and information about the political process surrounding Michigan state policy issues. It is run out of the Department of Political Science at Michigan State University, with participation by students from the College of Social Science, the College of Communication, and James Madison College.
The thoughts, opinions, and positions represented herein are solely those of the participating students and in no way represent an official position or policy recommendation of Michigan State University.
Michael Raley is a fourth year Sociology and Public Administration/Public Policy student at Michigan State University. He is especially interested in the public policy, politics, and sociology of urban space, as well as transportation systems and public transit. A native of the Grand Rapids area, Michael is currently an intern in the office of State Representative Roy Schmidt, who represents the west and northeast sides of the city. He also aspires to pursue a career in urban and regional planning, and hopes to attend graduate school for such a course of study.