Michiganders say emergency managers wield too much power

emergency manager

With Flint on their minds, state residents are overwhelmingly opposed to Michigan’s divisive emergency manager law and want the state should work more collaboratively with locally elected officials.  

Chris Kolb

Chris Kolb of the Michigan Environmental Council

Michigan residents look with deep suspicion on the state's emergency manager law and think it should be reformed, according to a Center for Michigan report released today.

Entitled “Fractured Trust: Lost faith in state government and how to restore it,”  the report found that 81 percent of roughly 2,750 state residents engaged in a series of community dialogues across Michigan in 2016 had “low” or “very low” trust in the emergency manager system.  A separate telephone survey of 2000 residents found nearly two-thirds had similar lack of  trust in the system.

Support for changing how emergency managers operate was substantial, with more than half the people interviewed in community conversations approving of “more checks and balances” and “shared decisions” between emergency managers and local officials. The views were collected over nine months in 2016 at 125 town hall meetings and in a phone survey of 2000 residents across the state.

It is the Center's sixth annual statewide public engagement campaign, with the focus in 2016 on the level of trust residents have in state government to perform a broad range of critical functions. The Center for Michigan, an Ann Arbor-based nonprofit, is devoted to increasing public understanding and involvement in state policy issues. The Center is also home to Bridge Magazine, which conducts independent nonprofit journalism across the state.     

MORE COVERAGE: Michigan residents to Lansing: We don’t trust you to do the basics

MORE COVERAGE: Phil’s column: Residents are losing hope for a better Michigan 

The findings of broad public opposition to the state’s emergency manager law  comes a month after a University of Michigan survey found a majority of officials from 1,300 cities, counties, townships and villages also favor overhaul of the law.

The Center gathered public sentiment on the law through much of 2016, a time of extraordinary local and national attention focused on Flint, as it became clear that state emergency managers were largely responsible for decisions that led to toxic lead entering the city’s water supply. It was a state-appointed manager who first approved plans to switch the source of Flint’s drinking water to the Flint River, without ensuring the water was properly treated. The switch was made to save money for the impoverished city.

As a result, thousands of children were exposed to toxic levels of lead and, nearly three years later, Flint residents must still rely on filters and bottled water. As Bridge has revealed, the water switch also likely spawned an outbreak of Legionnaire’s disease in the Flint region that killed at least 12 people and sickened scores more.

Chris Kolb, a former state representative and president of the Michigan Environmental Council, said state residents' opposition to the emergency manager law is hardly surprising.

Kolb was part of a five-member Flint Water Advisory Task Force that issued a March 2016 report that traced much of the blame for the crisis to the emergency manager system.

“Flint was under the control of state-appointed emergency managers, who made key decisions that contributed to the crisis,” the report stated. “Because of these two facts, the state is fundamentally accountable for what happened in Flint.”

Among other recommendations, the report called for “measures to compensate for the loss of the checks and balances” under the law and provision of an ombudsman in state government to ensure emergency management takes into account local concerns.

“When things went wrong there, nobody had anywhere to go with their complaints. It really removed the people from any decision making,” Kolb told Bridge.

Michigan has had an emergency manager law since 1988, though it was strengthened in 2011 before state voters rejected the law in 2012. Gov. Rick Snyder then signed legislation weeks after that rejection that restored most of its provisions and barred voters from participating in a future referendum that would rescind it.

Low Trust in Emergency Manager System

How do you rate your level of trust in the state emergency manager system?

Very high: 3%

High: 17%

Low: 33%

Very low: 48%

*Opinions expressed in a series of community conversations with nearly 2,700 people

 

The beefed-up law grants state-appointed emergency managers sweeping authority to assume powers held by mayors and other locally elected officials in financially troubled cities or school districts. Emergency managers were given the power to sell property, change labor contracts or eliminate entire departments in struggling cities and school districts, and is considered among the most sweeping in the nation.

In the past 15 years, a dozen municipalities or school districts have come under emergency management in Michigan, including, most famously, Detroit, which eventually went through municipal bankruptcy proceedings under emergency manager Kevyn Orr.

The state’s increased reliance on the EM law accelerated with a decade-long economic slide and steep unfunded pension and retirement health care debt that plunged many cities and school districts into severe financial duress.

By and large, emergency management has landed on communities with large minority populations, leading some to conclude its application is discriminatory.

That racially tinged history is reflected in comments collected in the Center's community conversations, held from March through December of last year.

“What concerns me is the emergency managers have been primarily used in minority situations,” said one participant. “Other towns are in trouble but they don't force the emergency manager on them. Michigan needs to take a long, hard look at the racial implications.”

The Michigan Civil Rights Commission echoed that concern in a report it released in February that concluded the law is intrinsically discriminatory, deepening the disparity between poor urban and affluent suburban communities.

“If you live in Michigan, there is a 10 percent chance that you have lived under emergency management since 2009. But if you are a black Michigander, the odds are 50/50,” that report found.  

“In short, the EM law as applied far too often addresses the problems of already financially stricken governments in second-class communities, segregated based on race, wealth and opportunity, by appointing an emergency manager whose toolbox is filled with short term solutions that are contrary to the long term interests of the people living there.”

Some residents participating in the Center’s community conversations said they were concerned the emergency manager law undercuts basic democracy.

A Flint resident stated: “The vote is being taken over by emergency managers. It takes away confidence as an American citizen, and it hurts even more as a veteran because it needs to be proven to me that my vote counts.”

Another stated: “I don’t endorse the emergency manager system, as much as I understand there’s a need for something to happen when local elected officials fail. But I just can’t get behind a solution that is this undemocratic. In a perfect world, it could work, but we will never be in that perfect world. So I feel like we have to look to something else other than the emergency manager system.”

Jim Ananich

Democratic state Sen. Jim Ananich

Democratic state Senate Minority Leader Jim Ananich of Flint said the law needs reform. “It is not a success-based model. It is a failure-based model,” he said.

Ananich said he favors some sort of “early warning” system in which signs of financial stress in a city or school district would trigger assistance by outside financial experts. He said he would back use of an emergency manager only as a “last resort.”

“There are much more positive and supportive ways to do it,” he said.

In Detroit, however, many credit the emergency manager law with helping Michigan’s largest city pivot to a financial recovery. Advocates of the emergency manager’s role in Detroit say it played a pivotal role in the so-called grand bargain that sped that city's exit from bankruptcy while largely protecting retiree pensions and sparing the prized art collection at the Detroit Institute of Arts.

Consummated under emergency manager Orr, the deal pledged more than $450 million from philanthropic and DIA benefactor sources and nearly $200 million from the state to the city, while creating a panel to oversee city finances for 13 years. The deal spared Detroit from what could have been draconian cuts to pensions and city services under authority of the bankruptcy court.

In 2015, retired federal judge Steven Rhodes – who presided over the bankruptcy proceedings – gave praise to Orr as a key player in the bankruptcy outcome.

“He had the single most complex job in this case. The challenges he faced were enormous,” Rhodes said.

While critics continue to call for reform of the law – or its end – a federal appeals court ruled last September that the state of Michigan can continue to use emergency managers to solve local financial crises.

Ari Adler, spokesman for Gov. Rick Snyder, said the governor “is always open to discussing revisions to programs if people believe there are ways to improve them.”

He added: “The emergency manager law in its current form has worked well for residents in many instances, including in Detroit...but the governor isn’t opposed to making improvements. If the Legislature were to take up bills addressing changes and send them over to Gov. Snyder, he would review them with an open mind.”

About The Author

Ted Roelofs

Ted Roelofs is a Bridge contributor based in Grand Rapids. He can be reached here.

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Comments

Andrew Paterson
Tue, 03/21/2017 - 9:33am

The EM law is the single most sweeping legislation in over two thousand years of history. Even the Romans put both a time limit (six months) and a 'power' limit (the Roman senate continued to be in charge of all domestic matters, the EM had all military crisis power) on their EM law. Michigan's ALEC generated EM legislation absolutely wiped out all democratic participation and input and papered over our Michigan constitution (and btw our judiciary - and the 6th cir- simply stood by and watched and even cheer-leaded this travesty).

While it is hard to argue that cutting $7 billion wasn't a success, it's also not hard to see in Flint and Detroit schools, that putting underemployed bean counters in complete charge of cities and schools - that have missions they know nothing about - sees them focus on balance sheets and income statements and to hell with the mission and the consequences to the citizens and students.

And why don't citizens have trust in Lansing? The esteemed Legislature put their middle finger up to the citizens in the lame duck session after Public Act 4 was repealed by the people and passed the even more draconian current EM law. Yes, Governor, signing that law shows you that karma is indeed a bit--, isn't it?

Why don't citizens have trust in Lansing? Not only the Legislature and the Governor and the judiciary let them down, but politicians generally weren't responsive, e.g. the Attorney General wannabe governor, produced an entirely lame opinion citing not the clear Michigan law but North Dakota(!) law to allow the smooth EM transition from the people repealed law to the lame duck middle finger new EM law.

So, yes. Michigan citizens rightly question the EM law and the politicians that foisted it upon them.

M.J.Way
Tue, 03/21/2017 - 11:15am

Could not have said it better. Totally agree.

Ben Washburn
Tue, 03/21/2017 - 12:00pm

No one seems to remember WHY we have an Emergency Manager law. Way back when it was adopted, it was done to reassure local government bond-buyers that they would not end-up after buying a 40-year, tax-free capital-improvement bond, that they would never forfeit their capital way down that 40-year road in a municipal bankruptcy. If local finances came to that point, then a State Emergency Manager would come-in to protect their investment. In return for that assurance, bond-buyers would be willing to buy those bonds at a lower rate of interest, which would advantage the municipality in making whatever capital improvement that the needed, be it roads, sewers, water supply, or whatever. Without that assurance, bond-buyers would want a much higher rate of interest, because of the added risk that they would be taking. There is nothing sinister about this arrangement; it makes very good public policy sense. Bond-buyers have always known that locally elected officials always kick their financial cans down the road, and that sooner or later, that will result in insolvency. When you are doing a 40- or 50-year deal, this simply makes sense.
By the way, the Emergency Manager law is only one piece of the measures which were adopted in order to gain this bond-buyer advantage. Also were included an oversight and approval of every local bond issue by a State agency, and by the implicit full faith and credit of the State itself in assuring that those bonds would be fully repaid.

These laws were enacted to enable every municipality across the State to benefit from a lower rate of interest on their capital improvement bonds. They were not in any sense intentionally created to deprive predominately African-American communities of their right to select their own representatives. But in the predominant economics of this land, they have had that unintended consequence. Black elected leaders are no better than the white ones who preceded them; they all kick the economic can down the road until it comes to an unavoidable cash crisis, and triggers the Emergency Manager laws.
So, does this give everyone else a free Get Out of Jail Card? For more than 40 years, every municipality in this State has benefitted from getting more and more done for less and less.
The consequences may have been unintended, but they are real, and in most cases, they are devastating for the folks who now live in those many places. Is this really right?

Andrew Paterson
Tue, 03/21/2017 - 3:27pm

That was indeed the principal reason for the first EM law and it worked to do just what you said. But the new versions (both the people repealed and the lame duck reinstatement) were much broader than that. If the Legislature wanted to improve on the original they could have adopted the North Carolina law that had a necessary state review of all bond offerings (and budgets?) for local units of government that made sure they were within norms. Instead the legislation led to state takeovers of local units of government after the problems had arisen - the fire was well under way, the barn door was already open, etc - and the problems were more difficult to deal with fiscally and politically. And the legislation wasn't coupled with any fisc from Lansing... just try and fix it with the local unit's own dwindling resources. It almost forced the slash and burn approach. And we shouldn't be surprised at where that led.

Ben Washburn
Tue, 03/21/2017 - 10:34pm

Andrew:
I haven't followed the more recent iterations of the Emergency Manager law. But, I would not doubt that what you say is pretty true. I was privy to passage of the original Bills and know why they were adopted. ALEC and dark money had no role there, but I would not doubt that that kicked in more recently.
I applaud Bridge Magazine for placing these issues more firmly in the public discourse, and I think that both you and I should do the best that we can to keep our comments solidly based, despite our personal take on them.
As a former elected member of the Detroit Public Schools Board (1989 to 1999), I am firmly opposed to the intervention of Emergency Managers into local school administration. But, also be aware, that as having been a member of a reform board, I am no longer a supporter of any kind of external top-down intervention into the management of any local school, whether by the State, by an Emergency Manager, or by a local school board. All of those interventions, however well rationalized, sap the strength of teachers to really be the best that they can be. If a district is not able to manage it's finances, then just let it go broke, create a crisis, and leave it to find it's own way out. The more that you try to avoid these crises, the easier you make it for them to slide into them.

Matt
Wed, 03/22/2017 - 8:04am

Polling results like this don't mean a damn thing and are a complete waste of everyone's time. People don't understand that state taxpayers are stuck in many/ most cases backing up the liabilities incurred by municipalities (in spite of Detroit's example), so of course the state should have the ability to step in and try to get finances on right track. If something should be changed, it is that lower levels of government and other Gov't entities should be allowed to go bankrupt without any expectation of state backstop, then we'd be fine getting ride of the EM law! But I'm sure that's not what Sen. Jim Ananich has in mind!
Since it's sure to be brought up, Flint's EM was allowed to jump into making capital improvements for a dying city rather than sticking to his job description - This is Snyder's big fault in the Flint water debacle.

Ben Washburn
Sun, 03/26/2017 - 2:40pm

I too am not sure what Senator Ananich meant by there being more supportive ways of dealing with a financial crisis. Even the current law provides for several milder steps before triggering the appointment of an Emergency Manager. Bridge writer Roelofs really should have pressed him on spelling-out exactly what he meant by that statement. If he was just blowing smoke, then Roelofs should have omitted him from the story. Bridge Magazine can certainly help all voters understand such crises much better if they press their sources for concrete detail.

James Bell
Wed, 03/29/2017 - 5:31am

Unfortunately, our Republican legislature is not used to listening to the people in general. They listen in order to first their financial backers, second their political base, third lobbyists and that covers the 20%.