Pontiac's EFM Makes the National Media

[corktownyuppie]

Slate.com interviews Democrat Mayor of Pontiac, Leon Jukowski, about what it's like to work under an Emergency Financial Manager...

Under this system, the City Council isn’t paid. Jukowski is paid as a consultant—$30,000 a year for a job that used to pay six figures—answering to Emergency Manager Louis Schimmel. He was a fellow at the Mackinac Center, Michigan’s free-market think tank; the mayor is a Democrat. Jukowski is fine with this. “I ran,” he says, “because I just got sick and tired of watching the city go sideways.”If you don’t feel like sugar-coating it, the emergency manager—Pontiac is one of three Michigan cities currently run by one—is an admission that democracy occasionally doesn’t work. Michigan introduced an emergency “financial” manager law in 1990, as a way to straitjacket cities that were failing. Schimmel made his reputation running turnarounds in the small, benighted cities limning Detroit. He succeeded, largely, but he was frustrated by limits.

Obviously, Pontiac is not Detroit. But it does indicate an salient point: sometimes, democracy doesn't work...

It’s all so predictable, says Jukowski. “You’re not going to have the political class coming up and saying, ‘Oh thank you for removing my authority over our police department,’ ” he says. “ ‘Thank you for making it impossible for me to place my relatives in positions in city hall.’ There’s this dichotomy of a political class saying, ‘You know, this is horrible, this is a travesty, this is the worst thing that could ever happen, they’re violating our right to vote, etc.’ But the man on the street is saying, ‘You know what? I’ve got better police service than I had six months ago. The toilet still flushes, and when I turn my shower on the water still comes on. And they’re fixing the problem downtown.’

http://www.slate.com/articles/news_a...y_failed_.html

I think it's gonna happen. And I think it's gonna hurt. But we've been trying to slowly pull off the band-aid for years. Decades? Let's just pull off the band-aid so we can get started on re-building.

Yes, I think that the low-income residents are going to get screwed in the process. But I don't think it really matters whether you have a Mayor or an EFM. I think they are going to get screwed either way.

[Dexlin]

You know, only kind of tangentially related, but I've always wondered that if a municipality is a creature of the state, and if at least in theory a state is the creature of the feds, how would people be reacting if a president suspended a state government and ran it from Washington? I find a lot of folks don't mind this kind or arrangement until it happens to them. I get the feeling that folks don't mind this so long as it happens to one of those communities [[i.e. Detroit, Inkster, Highland Park, Ecorse...) I don't think people realize with the threshold the Michigan government has set just how many other communities are going to be inadvertently be netted when this is all said and done. I sure hope that property values recover pretty soon.

[corktownyuppie]

You know, only kind of tangentially related, but I've always wondered that if a municipality is a creature of the state, and if at least in theory a state is the creature of the feds, how would people be reacting if a president suspended a state government and ran it from Washington? I find a lot of folks don't mind this kind or arrangement until it happens to them. I get the feeling that folks don't mind this so long as it happens to one of those communities [[i.e. Detroit, Inkster, Highland Park, Ecorse...) I don't think people realize with the threshold the Michigan government has set just how many other communities are going to be inadvertently be netted when this is all said and done. I sure hope that property values recover pretty soon.

Well, I can't speak for anyone else, but...

[[1) I would vehemently oppose any federally appointed state government
[[2) Unless, of course, my state pension checks started to bounce, and then I would be totally fine with the Feds insuring my pension check in exchange for authority to run the state.

That's the issue. No one here wants an EFM. But no one can find a route to do the things necessary to avoid one, either.

[Mikeg]

.......if a municipality is a creature of the state, and if at least in theory a state is the creature of the feds, how would people be reacting if a president suspended a state government and ran it from Washington?.

The US Constitution and its Amendments define the powers denied to the federal government and reserved by the states. While your first "if" is supported by our state constitution, that second "if" is nothing more than a theoretical wet dream held by those who believe the Constitution can be endlessly re-interpreted until it would be unrecognizable to our Founding Fathers.

[corktownyuppie]

The US Constitution and its Amendments define the powers denied to the federal government and reserved by the states. While your first "if" is supported by our state constitution, that second "if" is nothing more than a theoretical wet dream held by those who believe the Constitution can be endlessly re-interpreted until it would be unrecognizable to our Founding Fathers.

I agree with your conclusion. I think Dexlin's point was more analogous in nature, rather than literal. I interpreted her question as to say the following:

- It's easy for Michiganders to be cool with the EFM/EM model as long as it's not their own municipality having to be ruled by it
- If these same people who were in favor of EFM/EM rule were all of a sudden subject to it in the same way, except coming from a federal level, where foreigners came in and took over, then how would they feel?

I think Dexlin poses a fair question in the hypothetical sense. For many Detroiters, having someone from Grand Rapids or Lansing or Traverse City or Mackinac or Port Huron really would be a very foreign influence...both racially, socio-economically, etc.

And I think that anger and resentment deserves to have a voice and is rooted in valid emotions coming from being powerless and under someone else's control. I mean, c'mon...no one wants their father coming in and telling them what to do. Even moreso, no one wants someone else's father coming in and telling them what to do. Lastly, no one wants the father of someone whose family has been involved in a multi-century feud with them come in an tell them what to do.

That said, my conclusion is still the same. I'm against someone taking over our self-rule, until the point where our self-rule has declined to the point where my paycheck bounces.

[3WC]

Federal law is already at play there, at least indirectly. Chapter IX of the Bankruptcy Code governs the bankruptcy of municipalities. The MI Emergency Manager statute is the State's attempt at a shortcut which permits state rather than federal control over the process. Now, I read that the statute is under attack and may be deemed illegal. That wouldn't be a bad thing in my opinion. There are many municipalities, including Detroit, which should declare bankruptcy if their [[and state) leaders had any smarts, or guts, not two qualities usually associated with politicians.

In a bankruptcy, the Trustee would be appointed by the Federal Bankruptcy Court judge, not some hack local politicians and would not be subject to petty local/state political pressures that bedevil EFMs.

[Scottathew]

That's the issue. No one here wants an EFM. But no one can find a route to do the things necessary to avoid one, either.

Yup. The problem is that hard choices have to be made:

1) Cut services
2) Make the services you don't cut more efficient [[labor costs, management costs, and structure)
3) Raise taxes

People whine and cry about all three options.

1) Cut services - "But services already suck, cutting them more will only make the city work."
2) More efficient - "Cutting labor costs is an attack on the American middle-class! If you make labor costs resemble private sectors costs it's because you hate workers!"
3) Raise taxes - "My taxes are already high. I don't have any money as it is. You're cutting services but raising my taxes?"

All of the arguments you typically hear are very logical. The issue is that Detroit has been spending more than it takes in for a long time. Short-term budgets have been subsidized\shored up by selling long term assets, moving money around in accounting gimmicks, and flat out lies.

Over the years the annual deficits have grown to what they are now. Instead of plugging the leaks when they were small and manageable, we're not trying to fill an empty pool up that has no walls.

Another issue is that the city's 140+ square miles are so sparsely and unevenly populated that delivering services efficiently is impossible in some cases. When you've got a block that only has one or two residents on it, you're still responsible for maintaining a water main and sewer throughout the entire block, keeping the street lights on for those two people, providing police protection for just two people, sending a garbage truck down an entire block for just two people, and providing all the other services over a large area for a small amount of people.

Detroit is now half as dense as Chicago and Philadelphia, and Detroit is 1/5 as dense as New York City.


How do the folks here feel about some kind of forced take over of hold-outs, where if the lot vacancy rate of a street goes above a certain level of vacancy percentage that homeowner would essentially be forced out through some kind of act of eminent domain. I don't know if this would be legal or ethical, but it's perhaps a way to get folks out of high vacancy areas.

[corktownyuppie]

How do the folks here feel about some kind of forced take over of hold-outs, where if the lot vacancy rate of a street goes above a certain level of vacancy percentage that homeowner would essentially be forced out through some kind of act of eminent domain. I don't know if this would be legal or ethical, but it's perhaps a way to get folks out of high vacancy areas.

It's not legal. Private property rights are paramount, and for local/state government to force property owners to move require an almost insurmountable standard.

However, there is a quote that goes “politicians will do the right thing, but only after they have exhausted every other option.”

I'm sure that when this whole thing is said and done, there will be a re-densifying of the Detroit population. Not because it's the "right thing to do" or the "logical thing to do". It will happen because it will literally be the ONLY OPTION in order for the bills to get paid.

And in my opinion, the sooner we start, the sooner we get there.

[Scottathew]

It's not legal. Private property rights are paramount, and for local/state government to force property owners to move require an almost insurmountable standard.

Great point. My search for a solution has come up with something that seems to be rather un-American.

I agree with you that Detroit will come back. It starts with the jobs coming to Detroit. Then, when some of those people filling those jobs are either hired from, or move to the city, we'll start to see more. Where jobs and people go, other commercial services will start to pop up.

I've seen it happening downtown, as businesses start to open up downtown in response to thousands of jobs coming down.

People are still afraid to invest. However, I hope there will be a tipping point where people will be afraid not to invest, because they don't want to miss out on opportunity.

[Wesley Mouch]

It's not legal. Private property rights are paramount, and for local/state government to force property owners to move require an almost insurmountable standard.

However, there is a quote that goes “politicians will do the right thing, but only after they have exhausted every other option.”....

Agreed that forced relocation would be pretty hard, but more achievable seems to be an elimination of disproportionately expensive services to those left behind in a newly rural area. I would be very politically unpopular, but combined with a reasonable economic incentive, I think this could work. Your right to stay would not be abridged, but your right to urban-style policing [[such that you have), street lights, stop signs, sidewalks, etc. would be eliminated. But I'm sure there are 'fairness' laws that prevent such a rational act.

I'm sure we would all agree that a rational government, freed of historical rules written for other purposes, would do this in the best interests of its collective citizens.

What we have now is a disproportionate tax burden on the poor residents of Detroit who are required to subsidize the infrastructure of now-suburban resident. Shouldn't the left take up this fight against this discrimination. Why shouldn't Warren or Richmond pay for the infrastructure legacy left behind by their residents.

[Wesley Mouch]

Federal law is already at play there, at least indirectly. ...In a bankruptcy, the Trustee would be appointed by the Federal Bankruptcy Court judge, not some hack local politicians and would not be subject to petty local/state political pressures that bedevil EFMs.

Back on topic....

I really like the idea of making the bad medicine of an EFM even worse with true bankruptcy. the worse the medicine, the less likely cities [[and their unions) will let things go there.

[Detroitnerd]

Sometimes, democracy doesn't work.

Here's a handy guide to figure out how likely your democratic unit of government will either "work" or "not work."

Start with a score of 100

Does your unit have a significant black population? Subtract 100.

Does your unit have a black majority population? Subtract 300.

Are the majority of your elected officials republicans? Add 200.

If you scored 0 or lower, chances are your democracy will "not work" and will need to be taken over by an emergency manager.

Thank you.

[corktownyuppie]

Sometimes, democracy doesn't work.

Here's a handy guide to figure out how likely your democratic unit of government will either "work" or "not work."

Start with a score of 100

Does your unit have a significant black population? Subtract 100.

Does your unit have a black majority population? Subtract 300.

Are the majority of your elected officials republicans? Add 200.

If you scored 0 or lower, chances are your democracy will "not work" and will need to be taken over by an emergency manager.

Thank you.

Oh c'mon, now DNerd, do we need to review the class on correlation vs. causation?

Democracy can work in Detroit. And we can still avoid an emergency manager. All we need is for all the leaders and citizens to voluntarily do all the things they need to do so that all the bills can still get paid.

We're actually making progress. When the division between the Mayor's office and City Council is not "whether" to re-structure, but "how much" to restructure, you can see democracy working. It does, however, make me wish we were having these conversations 10 years ago.

[Detroitnerd]

If it isn't democratic, expect me to fight it every inch of the way.

[corktownyuppie]

If it isn't democratic, expect me to fight it every inch of the way.

This isn't an attack on your argument, so I hope you don't take it that way. Just want to understand...

If in a hypothetical world, the Mayor and City Council all unanimously agreed that they can't solve the financial problems and voluntarily turned over control to an EM, would you consider that democratic?

Similar to the way a mental health patient may not be legally required to be hospitalized, but at some level he/she realizes that they've lost the control mechanisms to function and so they voluntarily sign away their freedom in order to be treated?

[Detroitnerd]

This isn't an attack on your argument, so I hope you don't take it that way. Just want to understand...

If in a hypothetical world, the Mayor and City Council all unanimously agreed that they can't solve the financial problems and voluntarily turned over control to an EM, would you consider that democratic?

Similar to the way a mental health patient may not be legally required to be hospitalized, but at some level he/she realizes that they've lost the control mechanisms to function and so they voluntarily sign away their freedom in order to be treated?

If we elect somebody and they decide to give stewardship to another party that was NOT elected, it would be patently undemocratic. And if they didn't feel they could control the situation, why would they seek election?

Anybody who "voluntarily" signs away freedom doesn't deserve any in the first place.

[Detroitnerd]

Everyone is gangbusters for "relieving" other people of democracy. Just wait until it happens to you. Just wait until somebody comes to "reasonably" take your democracy. You will find yourself suddenly a great deal uneasier with the whole idea when it's your vote that doesn't matter, when there's no accountability. For instance, the people of Grosse Pointe learned quite a lot over the last year.

[Wesley Mouch]

If we elect somebody and they decide to give stewardship to another party that was NOT elected, it would be patently undemocratic. And if they didn't feel they could control the situation, why would they seek election?

Anybody who "voluntarily" signs away freedom doesn't deserve any in the first place.

Detroitnerd: Democracy is not an open checkbook to life. Its the responsibility to manage your own affairs -- if you can.

Ways to lose your democratic rights:

1) Allow outside invaders to take over -- see France circa WWII. Decisions will be made by others.
2) Allow civil disorder, even for a just cause -- see Detroit circa 1967 or Los Angeles cira November 2011. Decisions will be made by others.
3) Run out of money. See Detroit, Pontiac, Harrisburg PA, Vallejo CA, Pritchard AL. Decisions will be made by others.

btw, does anyone know if Vallejo or Pritchard are Democratic or Republican. Detroitnerd's logic that this is only affecting cities that lean left seems weak to me. A former San Diego city attorney in the NYTimes...“Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, “We’re all on the same conveyor belt. Prichard is just a little further down the road.” http://www.nytimes.com/2010/12/23/bu...pagewanted=all

[cramerro]

I am somewhat ashamed to admit that I would not be opposed to an EFM coming in if my town were in dire straits. Living in Wayne County, in my gross generalizing estimation, ratchets up the political factor 100 times. Even those in township government are connected with higher ups so strongly, and are so concerned about thier own interests, that doing the 'right' thing when times are the toughest is unachieveable.

Yes, this means that democracy has failed to a certain extent. One convoluded and seemingly republican spin is that we also elected the people who put the EMF law into place. This isn't a dictator or even someone from outside of our state imposing thier singular will. This is a safeguard put in place to help us help ourselves where our local officials have/are failing. The law recognizes the even more significant long-term harm that municipal bankruptcy will have, and takes reasonable, albiet drastic, steps to avoid that scenario at all costs.

They aren't taking over the press, they aren't changing zoning laws or local ordinance that allows us to do or not do whatever. They are tasked with the apolitical charge of doing the minimum necessary to align the community's expenses with its revenue in the short and long term.

Are they impacting low income people more than not? Are low income people statistically more likely to be minorities? Are low income people who cannot chose to leave during the EFM smackdown? [[also, are low income communities left-leaning?) Yes on all accounts.

You can make the same arguments for how thier elected officials, past and present, have failed this vulnerable group all the more. It isn't a pretty picture either way. It does take away most local control over decisions for a period of time. It is not a blanket relief of the residents' democratic rights.

[Wesley Mouch]

...
Are they impacting low income people more than not? Are low income people statistically more likely to be minorities? Are low income people who cannot chose to leave during the EFM smackdown? [[also, are low income communities left-leaning?) Yes on all accounts.

You can make the same arguments for how thier elected officials, past and present, have failed this vulnerable group all the more. It isn't a pretty picture either way. It does take away most local control over decisions for a period of time. It is not a blanket relief of the residents' democratic rights.

Very good post. And this is a really important point. The people most harmed by their irresponsible elected officials are the poor. They are the ones who suffer poor city services the most. We have a responsibility to help them.

[[See last lines of article on Pontiac in Slate: But the man on the street is saying, ‘You know what? I’ve got better police service than I had six months ago. The toilet still flushes, and when I turn my shower on the water still comes on. And they’re fixing the problem downtown.’ I don’t think your average citizen gives a damn whether or not city council and I are being respected.”)

[corktownyuppie]

Everyone is gangbusters for "relieving" other people of democracy. Just wait until it happens to you. Just wait until somebody comes to "reasonably" take your democracy.

I'm a resident of Detroit and have been for 21 years, so just let me say...I don't want it to happen to me.

But, I also don't want THIS to happen to me, either...

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

And it's not like it was a surprise...

This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Wesley, btw, Prichard is 83% black with median income at $19,000, and so my bet is they're not racing to vote in republicans.

Good points have been raised about how down cycles of the economy disproportionately hurt the most vulnerable in society. And there is a high correlation between the most vulnerable with: the least educated and the lowest income.

Again, we can avoid an EM/EFM...we just need to do what needs to be done to prevent what's happening in Prichard from happening here.

And frankly, if I'm Gov. Snyder, I would say to Detroit, "I will not an appoint an EM/EFM until I get a resolution signed by the Mayor and the majority of the City Council."

It's not "us" vs. "them". It's what we're willing to do vs. what needs to be done.

[Jimaz]

Democracy can work...

I think thirty years ago the vast majority of Americans would have been dumbfounded and appalled by those words simply because they suggest that there might be a case where democracy can't work. It would have been thought unpatriotic.

Since then most Americans seem to have been softened up for some kind of blow and whatever it is, it won't be pretty.

I see political systems and financial situations as two completely distinct things. I find it highly suspicious that the two are being so casually conflated lately.

Financial problems, as difficult as they are, are far easier to solve than to win back a lost democracy. Hell, wars are fought over such things!

[Detroitnerd]

Those who would give up a little essential liberty for perceived security deserve neither. Sorry. That's just the way it is...

[bailey]

Those who would give up a little essential liberty for perceived security deserve neither. Sorry. That's just the way it is...

So, chapter 9 would be more palatable for you then? A federal bankruptcy trustee is less un-democratic than state actors interceding?

[Detroitnerd]

So, chapter 9 would be more palatable for you then? A federal bankruptcy trustee is less un-democratic than state actors interceding?

A bankruptcy would allow municipalities to reorganize their finances and negotiate with vendors. Corporations do this all the time. But the state has insisted that municipalities cannot file for bankruptcy. Instead, they have created a law that would have the government run by fiat by a czar, nullifying local elective democracy. This is anti-democratic.