Snyder's Emergency Financial Manager Bill. Too aggressive?

**socks_mahoney** · February-24-11, 07:36 PM

This was passing around the internet today....

Governor Snyder and the republican legislature are trying to pass a bill that would make it easier for emergency financial managers to take over cities and school districts. It seems to be going a little to far.

The bill allows not just cities and school districts to be taken over, but also townships and other small municipalities. Public utilities can also be taken over. [But wait theres more!] Any property or other entities owned by a city, twp, public utility, or school district is subject to being taken over by the appointed emergency financial manager.

There's 18 "valid" reasons to appoint an emergency financial manager, but the last "valid" reason is perhaps the most overreaching:

"The existence of other facts or circumstances indicative of financial stress, as
determined by the state treasurer [[for a municipal government) or by the state
school superintendent [[for a school district) [[new)."

Keep in mind that the state treasurer and state school superintendent are not elected positions. They are appointed by the Governor and State School Board [[respectively). The definition of an "emergency" would ultimately be up the whims of an unelected state official.

Once the emergency is declared the emergency financial manager can dissolve unions, the democratic councils that govern the city, township, school board or public utility, and paralyze elected officials from having any influence of the process.

Does this seem incredibly aggressive to anyone else? No mention of involving communities in the reshaping of themselves as they go through these changes. And even less talk of actually making an effort to raise revenue through smarter taxation. I understand the need to be able to swiftly manage the budgets of localities that go broke but this bill is totally anti-democratic.

See the bill here, esp. pages 6-8:

http://www.legislature.mi.gov/docume...HLA-4214-3.pdf

**mwilbert** · February-24-11, 07:48 PM

Yes, I think Vox posted on this as part of a different thread [[not specifically about this). The situations in which the manager could be appointed seem almost unlimited, and the powers excessive. On the other hand, the state's powers over its subdivisions are very great. Possibly some of this is not constitutional, but I wouldn't assume this is legally overstepping the bounds, despite my feeling that it is excessively broad.

**Gannon** · February-25-11, 07:30 AM

He will face increasing resistance to his plans, now that the governor of Wisconsin has implicated him in collusion with the Koch brothers in a scheme nationwide.

http://www.dailykos.com/story/2011/0...as-David-Koch-

I am now at a heightened state of awareness of hostility towards the average person and family and worker...there is a conspiracy afoot. Republicrites need to be sent a message that we will not be steam-rolled.

Cheers on this beautiful day...

DetroitDad · February-25-11, 07:42 AM

Thank you for posting that Gannon.

NorthEndere · February-25-11, 08:04 AM

Originally Posted by mwilbert

On the other hand, the state's powers over its subdivisions are very great.

That's not generally true in this country, and this state is no exception. If you're a chartered home rule city in this state, you get a lot of latitude. At the current time, the only real leverage the state has when it comes to cities in revenue sharing; outside of that, the state tends to mind its own business when it comes to local governance. This is in kind of direct contrast to Ontario, across the border, where their provincial legislature can merge and unmerge cities at a whim and direct what kind of services they can and can't offer.

All that said, yeah, this definitely seems unnecessarily aggressive. I'm a bit confused, though, as to why so many people seem so scared of this, seeing as how the state has always been rather cautious about taking on municipal emergencies, because apart from their always being a rather small pool of trained EMF's, taking over municipalities and school districts come with its own political perils and pitfalls. It's not the best way to win votes or make friends as has been shown the few times that the state has done this over the past few decades. That alone discourages the state treasurer from declaring financial emergencies willy-nilly. This isn't even to mention that the ultimate results of emergency management are rarely good ones. We have local examples of cities and districts falling multiple times back into emergencies. It looks like Hamtrack is already back on the short-list.

Vox · February-25-11, 09:06 AM

Originally Posted by NorthEnder

That's not generally true in this country, and this state is no exception. If you're a chartered home rule city in this state, you get a lot of latitude. At the current time, the only real leverage the state has when it comes to cities in revenue sharing; outside of that, the state tends to mind its own business when it comes to local governance. This is in kind of direct contrast to Ontario, across the border, where their provincial legislature can merge and unmerge cities at a whim and direct what kind of services they can and can't offer.

All that said, yeah, this definitely seems unnecessarily aggressive. I'm a bit confused, though, as to why so many people seem so scared of this, seeing as how the state has always been rather cautious about taking on municipal emergencies, because apart from their always being a rather small pool of trained EMF's, taking over municipalities and school districts come with its own political perils and pitfalls. It's not the best way to win votes or make friends as has been shown the few times that the state has done this over the past few decades. That alone discourages the state treasurer from declaring financial emergencies willy-nilly. This isn't even to mention that the ultimate results of emergency management are rarely good ones. We have local examples of cities and districts falling multiple times back into emergencies. It looks like Hamtrack is already back on the short-list.

In the House passed bill, the removal of city councils, and mayors has been removed. They can, however, be removed from office by refusing to cooperate with the EFM.

I'm not sure that it would not be that much of a good thing. Something has to give, however. The present model isn't very viable.

**daddeeo** · February-25-11, 09:08 AM

Typical ham fisted reaction to what Republicans think was a mandate by the voters.
Give them an inch and they take whatever they want.

**R8RBOB** · February-25-11, 09:32 AM

Originally Posted by Vox

In the House passed bill, the removal of city councils, and mayors has been removed. They can, however, be removed from office by refusing to cooperate with the EFM.

I'm not sure that it would not be that much of a good thing. Something has to give, however. The present model isn't very viable.

I suppose the Republicans realized that firing local government was a bit too much. I read the 18 requirements to install a EFM and I have agree that it gives the state broad authority to declare an emergency for anything. A creditor can ring the bell by simply writing to the state and the state can declare an emergency. The House or Senate can pass a resolution to request an review. This is too much and one has to wonder, was Detroit on the minds of the politicians when they were drawing this up? Removal of city councils and mayors before it was removed sounds very anti-Detroit.

**ndavies** · February-25-11, 09:32 AM

Originally Posted by daddeeo

Typical ham fisted reaction to what Republicans think was a mandate by the voters.
Give them an inch and they take whatever they want.

Just like the Democrats did when the current president was elected. The real answer is almost never on the far right or far left. It's usually somewhere in the middle.

**mwilbert** · February-25-11, 05:44 PM

That's not generally true in this country, and this state is no exception. If you're a chartered home rule city in this state, you get a lot of latitude. At the current time, the only real leverage the state has when it comes to cities in revenue sharing; outside of that, the state tends to mind its own business when it comes to local governance.

People say stuff like this, but as far as I can see it isn't true. The constitution only prohibits the state from doing a very few, specific things, like dissolving cities. Any kind of civic ordinance can be overridden at the state level. Pension plan rules, collective bargaining rules, transportation rules, number of school days, graduation requirements; all are governed at the state level if the state cares to act. And saying that revenue sharing is the only leverage, even if it were true, is not a very limiting statement. Look how fast the city caved over the regional veto on water board spending.

If the emergency financial manager bill being discussed here is constitutional, why would it be unconstitutional to appoint an emergency financial manager because a municipality's government was inept, but not yet insolvent? I think these powers are far less limited than some seem to think. Just because the state usually minds its own business doesn't mean that it doesn't have the power to do otherwise.

**Novine** · February-25-11, 07:56 PM

mwilbert's right. Being a home-rule state doesn't mean that the state can't exercise its authority in about any way it wants.

**skyl4rk** · February-25-11, 08:05 PM

This bill was sponsored by the representative from Southwest Michigan. The Benton Harbor City Council is under an EFM, are are being a bunch of complete boneheads. You can get some entertainment here after every CC meeting: http://www.heraldpalladium.com/local_news/

I'm not sure it is correct to say this is Snyder's bill.

NorthEndere · February-26-11, 08:59 PM

Originally Posted by Novine

mwilbert's right. Being a home-rule state doesn't mean that the state can't exercise its authority in about any way it wants.

That's not the arguement I was making. My point was that states generally stay out of imposing their will on municipalities so long as municipalities don't directly aggravate a state. States in the US generally don't enforce many of their own powers. My argument wasn't that states can't but that they generally choose not too.

I'll reiterate, you look across the border and a place like Ontario there legislature has willy-nilly merged and unmerged municipalities against their will in their modern history. That would never be politically feasible in Michigan, regardless of whether or not they'll eventually be able to do it, legally.

**Novine** · February-26-11, 11:58 PM

Fair enough. But the state legislature could force an Ontario-style amalgamation/consolidation of governments here if there was the political will to do so. A few years ago, I would have said "never" but things seem to have reached the point that it wouldn't surprise me if Snyder and Co. try to force some of the smaller government units to disappear.

**SteadySky** · February-27-11, 11:59 AM

As I understand it, the abilitiy to remove contracts, contractors, office holders and such are well entrenched into the legislation and process. Which is to say they are not immediate tools to use by a EFM. Provided that is true, I believe the tools need to exist as the intent is to fix the governmental systems. Hopefully they are well administered.

Personally, I think we have a fiscal mess on all levels of government and there has been too much "kick the can down the road" mentality and in order to fix items we may need some of these tools.