The Scandal of Michigan’s Emergency Managers

Joe Harris, state appointed emergency manager in Benton Harbor, Mich., unlocks the door of the city manager’s office.    REPOSTED FROM BANCO.ORG

On January 20 the progressive think tank Michigan Forward and the
Detroit branch of the NAACP sent a joint letter to Michigan Governor
Rick Snyder expressing concern over Public Act 4, the Local Government
and School District Fiscal Accountability Act. Signed into law in March
2011, it granted unprecedented new powers to the state’s emergency
managers (EMs), including breaking union contracts, taking over pension
systems, setting school curriculums and even dissolving or
disincorporating municipalities. Under PA 4, EMs, who are appointed by
the governor, can “exercise any power or authority of any officer,
employee, department, board, commission or other similar entity of the
local government whether elected or appointed.”
What
are the qualifications for such a powerful office and the six-figure
salary that accompanies it? Not much: PA 4 requires “a minimum of 5
years’ experience and demonstrate expertise in business, financial, or
local or state budgetary matters.”

 

Last
year the state held a pair of two-day training sessions for EMs, both
run primarily by companies that provide outsourcing services to
municipalities and school districts. Yet PA 4 made the emergency manager
the single most powerful person in the city.
Results
were swift. In April the Benton Harbor EM, Joe Harris, decreed: “Absent
prior express written authorization and approval by the Emergency
Manager”—himself—“no City Board, Commission or Authority shall take any
action for or on behalf of the City whatsoever other than: i) Call a
meeting to order, ii) Approve of meeting minutes, iii) Adjourn a
meeting.” The move in effect abolished Benton Harbor’s elected City
Commission and replaced it with an unelected bureaucrat, perhaps the
first time this has happened in US history.
The
implications went beyond Benton Harbor. “Since the beginning of your
administration, communities facing or under emergency management have
doubled,” Michigan Forward and the NAACP wrote to the governor, citing a
“failure of transparency and accountability” in the process of
determining which jurisdictions need an emergency manager. The financial
review team assigned to Detroit, for instance, had recently met in
Lansing, nearly 100 miles away—“a clear example of exclusion and voter
disenfranchisement,” according to the authors. On February 6 an Ingham
County circuit judge ruled that the Detroit team’s meetings must be held
in public.
Of
Detroit’s 713,777 residents, 89 percent are African-American. The city
of Inkster (population 25,369), which recently got an EM, has a black
population of 73 percent. Having EMs in both cities would mean that more
than half the state’s black population would fall into the hands of
unelected officials.
* * * * * * *

Everyone
agrees that something must be done to “fix” Michigan’s struggling urban
centers and school districts, although news of a $457 million surplus
in early February prompted the state budget director to declare, “Things
have turned.” But at what cost? In 2011 Governor Snyder stripped
roughly $1 billion from statewide K-12 school funding and drastically
reduced revenue sharing to municipalities. Combined with poor and
sometimes corrupt leadership and frequently dysfunctional governments,
these elements have brought Michigan cities to the brink of bankruptcy.
Residents of the hardest-hit places have fled if they are able.

* * *
The
state’s first emergency managers—previously known as emergency
financial managers—were appointed between 2000 and 2002 by Republican
Governor John Engler in the cities of Hamtramck, Flint and Highland Park
to prevent them from declaring bankruptcy. Although all eventually left
when their job was done—the last in 2009—all three cities are back in
the red. In January the Highland Park School District was assigned an
EM. (That city—population 11,776—is 93.5 percent African-American.)
Others followed, in Ecorse, Benton Harbor and Pontiac, as well as
Detroit public schools.
Under
PA 4, EMs have proven to be a divisive solution. Outsourcing services
to private companies and abolishing collective bargaining takes a page
right out of the right-wing playbook: a 2011 report titled “101
Recommendations to Revitalize Michigan,” published by the conservative
Mackinac Center for Public Policy, calls for ending “mandatory
collective bargaining for government employees who already enjoy civil
service protections.” Many are worried that EMs will hasten the
gentrification of places like Benton Harbor, pushing out poor residents
to make way for developers. In one of his first acts under PA 4, Joe
Harris replaced nine people on the Brownfield Redevelopment Authority
and all nine members of the planning commission.
Despite
their relatively short history, EMs have a record of abusing their
powers. This past summer Arthur Blackwell II, Highland Park’s former
emergency financial manager, was ordered to repay more than $250,000 he
paid himself. In Pontiac EFM Michael Stampfler outsourced the city’s
wastewater treatment to United Water just months after the Justice
Department announced a twenty-six-count indictment against the company
for violating the Clean Water Act.
Multiple
efforts are under way to rid Michigan of PA 4. The first is a lawsuit
brought in June 2011 by the Sugar Law Center for Economic and Social
Justice and the Center for Constitutional Rights challenging the law
under the state Constitution. Despite efforts by the Snyder
administration to bypass the legal process and force the
Republican-controlled state supreme court to hear the case immediately,
the lawsuit is pending. Representative John Conyers is pursuing the
issue through the Justice Department, arguing that the law’s impact on
minority populations may violate the Voting Rights Act.
But
Michigan Republicans seem to be most concerned about a petition drive,
organized by Michigan Forward, seeking a citizen referendum to overturn
the law. As of mid-February the petition had more than 200,000
signatures, well over the number necessary to put the law on hold. The
group plans to turn in the petitions on February 29. Since PA 4 replaced
the law that created emergency financial managers, this could eliminate
the positions in Michigan until the referendum is voted on in November.
GOP
lawmakers are discussing replacement legislation, with Michigan House
Speaker Jase Bolger warning about “the chaos that could ensue if the
emergency manager law is suspended.” Since Michigan law prevents
referendums on appropriations bills, PA 4 opponents fear that any such
law will contain an appropriation to make it “referendum proof,” a
tactic already used by the state GOP this year.
The
outcome of the citizen referendum and the constitutional challenges may
well determine if laws like PA 4 remain unique to Michigan or become
the national standard for dealing with impoverished urban areas. With
the Indiana Senate having just passed an emergency manager bill of its
own, we may be heading down that path. by Chris Savage

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