EM law had unintended racial consequences in Flint and Detroit

Michigan’s leaders are wrestling today with a water crisis in Flint and a public school crisis in Detroit. It is noteworthy that 60 percent of the 8,800 children under 6 living in Flint are African-American. And of the 47,000 children in Detroit public schools, 81 percent are black.

Think about the Michigan cities that either signed a consent agreement to avoid an emergency manager or had one appointed: Allen Park, Benton Harbor, Detroit, Ecorse, Flint, Hamtramck, Highland Park, Inkster, Lincoln Park, Pontiac, River Rouge and Three Oaks. Seven of the 12 are majority black cities and one more has a representation of blacks far above the state average. Five school districts had emergency managers or signed a consent agreement: Benton Harbor, Detroit, Highland Park, Muskegon Heights and Pontiac. In each district, almost all students were African-American. The legislature, in 2014, empowered state officials to terminate financially troubled school districts. The first two that were closed, Inkster and Buena Vista, had majority-African American enrollments.

Is Michigan’s government targeting African Americans by denying them the right to control municipal governments and public schools in their local communities? I doubt that. But why is it that 51 percent of the state’s black population but only 3 percent of whites, lived in a city with an emergency manager or consent agreement, and only predominantly black school districts been taken over or abolished by the state?

It’s worth looking at the state’s history to understand. Michigan prosperity reached a high point in 1970, with per-capita incomes higher here than in all but six states. After that, employment opportunities shifted greatly. More than any other state, Michigan depended upon durable-goods manufacturing, where jobs declined rapidly, largely through improved labor productivity. Michigan remains a manufacturing state and vehicle production here may rise, but with few employment gains.

A falling tide drops some boats more

In 1970, there was a substantial African-American middle class but one highly dependent upon the vehicle industry and firms linked to manufacturing. At that time, almost half of middle-class black households in Michigan were headed by a person employed in durable-goods production compared to about a third of white middle class households.

The era since 1970 has been tough for whites in this state, too. Per-capita income for adult whites in Michigan, in constant dollars, in 2014 was only 2 percent higher than in 1970. But for African Americans, industrial restructuring had more devastating consequences. Per-capita income for them fell 10 percent. Looking at the earnings of employed men, we find that, in constant dollars, they fell by 11 percent for white men in this span, while those of African-American men dropped 25 percent.

Cities and school districts with substantial African-American populations experienced sharp declines in the financial resources of their residents and, in most, property values stagnated and then declined. The housing crisis and problems engendered by subprime lending had a substantial impact in low- and moderate-income black neighborhoods; by 2010, many residents were unable to pay property taxes. The emergency manager law may have been a racially neutral way to address crucial problems of municipal and school district insolvency, but its consequences were foreseeable and certainly not neutral with regard to race.

Policies are needed that will prevent municipalities and school districts from needing emergency managers in the first place. There will be no simple solution and no single change in taxing and spending will be thoroughly effective.

New strategy needed for statewide problem

Planning to eliminate municipal insolvencies should start by taking into account two important facts. First, population growth is an important stimulus for economic growth, but Michigan’s population is growing very slowly. Michigan’s population is aging rapidly and, by 2014, 41 of the 83 counties recorded more deaths than births. Slow growth will likely continue.

Second, economic growth is lethargic. To be sure, the number of jobs in Michigan increased somewhat more rapidly than the national average since the low point of the recession. But longer-run trends portray a less rosy picture. Michigan ranks 49th in the nation in job growth since 1990. Our per-capita income, in constant dollars, fell by 2 percent from 1990 to 2014, but in other states, it rose by 5 percent.

Current efforts in Detroit to make that city a center for entrepreneurship involving self-driving and fuel-efficient cars may be successful. Perhaps a Detroit-Ann Arbor-Lansing corridor will emerge as the go-to location for innovative manufacturing technology. If so, employment trends may brighten for Michigan, but Silicon Valley will offer stiff competition.

Michigan had a funding crisis in 1993 when schools in Kalkaska ran out of money and closed. The state adopted Proposal A, which decoupled school funding from the local tax base.

Consideration should be given to imposing one millage on all property in the state based upon its assessed value. Those funds could then be allocated to local governments on the basis of population and other relevant criteria. Implementing such a system would reduce the likelihood that places with concentration of low-income individuals run out of funds and need emergency managers. At the same time, the legislature could consider establishing a minimum level of fundamental services that cities and school districts must provide. The current EM law focuses on financial issues, not upon the quality of city or school district services.

Finally, the state legislature needs to plan a reduction in the number of local governments and school districts. In the three-county Detroit metropolis, we have 124 municipal governments. There are 900 school districts in the state. Only two states have more. Local control of local governments and schools is a cherished principle but efficiency and lower costs are also important.

This state has many resources that may contribute to economic growth. Certainly we have the wisdom to develop a more equitable system for supporting local governments so as to prevent the fiscal catastrophes that disproportionately compromised the quality of life in Flint, Detroit and other communities with numerous minority residents.

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Fri, 02/05/2016 - 3:16pm
I agree 100% with the idea that the EM law ought to be scrapped. However, unlike what is implied in the post above, this is due to the fact that EM's essentially absolve local communities for the irresponsibility of making poor choices for their leadership. Mr. Farley invoked the tired canard of racism behind the EM assignments, while ignoring the glaring fact that every one of the cities he cited is overwhelmingly democrat. I have no problem with the right to self determination, provided that it is coupled with the responsibilities that go along with them. If you cannot take the time to educate yourself on local issues and those running for office, I fail to see why it should be the responsibility of anyone living in another part of Michigan to pay for that willful ignorance? The EM law needs to be scrapped and replaced with...absolutely nothing. When they make bad decisions, local units of government should be allowed to fail and have those living within them should have to contend with the results of their poor decision making.
Fri, 02/05/2016 - 8:03pm
To KG-1, I would like to suggest that you try to slow down just a bit and re-read Mr. Farley's article more carefully than you did the first time around. It seems to me that you're responding with some very simplistic and (I hate to say it) some very predictable responses to a well-balanced and informative article...which more than anything else is trying to lay out the complexities and the historical facts and nature related to these very serious problems that didn't develop overnight and that are negatively affecting a lot of good and decent people in these noted districts in our commonly shared state, districts which have high poverty rates as well as significant African-American populations. And to me, those facts do matter. I'm an independent when it comes to party affiliation, but I couldn't help but notice that you yourself seem to want to 'invoke the tired canard' of blaming Democrats for being the source of the problem, as if being a 'overwhelmingly democrat' city is like catching some kind of fatal disease (not capitalizing 'Democrat' was a quick giveaway. Would that be called Democraticism?), as well as the other 'tired canard' of automatically assuming and blaming poor and minority communities for 'the irresponsibility of making poor choices' (I'm assuming that you either have a good working knowledge of the cultural and political and economic history of all these specific districts or you're just responding to a familiar but pesty jerk in your knee). I also think that your last paragraph seems to lack a lot of compassion for your fellow human beings, unless again, that you have some very specific relevant knowledge and have studied the process and context all of what's been attempted in order to deal with these issues as well as who has been involved in trying to solve these complex problems. You also seem to assume that we are all living in isolated little local geographic, economic, cultural, and political units completely separated and disconnected from all other intersecting geographical, economic, cultural,and political communities...that maybe you think that local, state, and federal governments, laws, and policies don't intersect or don't affect each other in any significant way and hence we have no responsibility for influencing or affecting the health and well-being of one another. Or maybe, that's what you consciously or unconsciously wish were true. And frankly, even if every one of these districts are totally to blame for the problems that have come their way (excluding the possibility that poverty, or that conscious or unconscious institutional racism, systemic economic injustice, out-sourcing of jobs, a shrinking tax base, or even simple bad luck had anything to do with it), I still wouldn't want to live in a world that you seem to be describing where it's every man (woman or child) for themselves, where we don't keep trying to pick each other up when we fall down (even if it is our own fault that we fell), If you happened upon a little old lady who fell down in the street would you first ask her if it was her fault that she fell down before you tried to give her a hand up? I'm glad to discuss different strategies or to try to problem solve with anyone. But when too many of us start out with a rigid set of assumptions which seem to automatically close the door on any other way of perceiving things, then we ain't gonna get real far as a people, are we? Because when it comes to building safe and welcoming and compassionate communities of human beings who may live inside various shades of skin, may have a variety of life experiences, and may reside in different neighborhoods or cities or states or countries or continents, we still effect and are affected by each other no matter how physically or psychologically removed we think we are from each other. We're all in this together brother (or sister). Peace, MG
Sun, 02/07/2016 - 8:55am
Thank you, MG. You crafted a wonderfully nuanced and thoughtful post in reply to someone trying (as usual) to subtly (or not so subtly) blame poor minorities for "poor choices" to explain away any problems in communities where a large portion of "those" people live. As if everything would be fine in Flint if those darn toddlers would've just done a better job educating themselves and making good choices.
Tue, 02/09/2016 - 12:58pm
MG & Shoegaze, For the record, I did read Mr. Farley's article in its entirety. And given that I spend a significant amount of my time in Detroit, south of Eight Mile & East of Telegraph (the reasons for that are unimportant to this post), I have heard everything presented above ad nausium for literally decades now, especially the hypothesis that racism is the underlying cause and that more money (always collected from outside of Detroit-proper) is just the solution that is needed to remedy all of its problems. There is a glaring problem with this hypothesis: It is not a problem that is replicated outside of Michigan.I travel quite a bit for my work. And one of the places I've visited is a little place called Wilberforce, which is just outside of Dayton, OH. If you haven't been there, it's a nice town to visit. Two universities are located there. It was instrumental during the Underground RR. It also has a majority black population, without the associated poverty and bombed out neighborhoods that you see in Detroit (or Flint or Pontiac). Now why do you suppose that is? It's located in the southern half of Ohio, which is traditionally a "red" part of that state. I didn't catch anything in the local papers (Dayton Daily News) regarding any scandals where the mayor had a paramour who tried using whom she slept with to get out of a traffic stop? I didn't recall reading about the president of the local school board being functionally illiterate or repeatedly touching himself "inappropriately" at public meetings? I don't recall reading about a city council woman pounding on the table like Nikita Khrushchev and referring to the council president as a cartoon character. I failed to find anything in the locally regarding her husband involved in numerous scandals relating to government issues items (like his SUV getting stolen while he "lent" it to his son). I can continue citing many, many more examples, but that will take me away from my point. People need to take responsibility or their choices in life. For when they don't, that is when things get ruined. Brian Dickerson even wrote a piece about that in last weekends Detroit Free Press (along with his own hypocrisy on this matter). And one final item: I have absolutely no problem in voluntarily helping someone...provided that I feel that they are in need of help. The squeegee men along the on-ramps back in the late 80's to the people walking up to me as a gas station asking me "for just $5 bucks so that they can get home" have been done to death. And the latest batch of cheats; walking up to your vehicle at traffic lights and asking for money. These guys even take credit cards!And frequent coffee shops on the West Side...and drive SUV's...and actually live in West Bloomfield...but I digress. If you really want to help, kick in some coin to the Salvation Army. But using the public treasury to assuage your conscience? There is a quote from Ludwig Von Mises which is very appropro for that "solution":"Once the principle is admitted that it is duty of government to protect the individual against his own foolishness, no serious objections can be advanced against further encroachments." Ludwig van Mises ("Human Actions")Michigan Taxpayers are already being socked with a tax to support the Detroit Zoo, a tax to support the DIA (who pays very its board very generously, I may add), a Michigan Taxpayer funded bailout of Detroit under the "Grand Bargain", the a tax we couldn't even vote for relating to the GLWA (the "assistance fund"), SMART (which does run lines into Detroit), the Birthday Tax along with gas tax hikes coming up soon, another Michigan Taxpayer bailout for DPS and let's not forget the soon-to-be announced RTA tax to pay for overseeing SMART & DDOT. I'd say that Detroit has received more than enough from those living outside of its borders. Without a seachange in local leadership, nothing will ever change relating to how Detroit is operated today.
Sat, 05/14/2016 - 5:32pm
well I say to you sir you are a straight out bigot which is why I cannot wait to get the hell out of michissippi!
Sat, 02/06/2016 - 9:43am
Just curious, how do you govern a community when the tax base is in rapid decline? After all, the American system of taxes and services is formed upon the idea of growth or stability, not rapid decline. The problem is systemic, not just a local one. Also remember the voters got rid of the EM law. The state legislature and governor recreated it with a trivial spending clause so it couldn't be reversed. That should tell you something.
Mon, 02/08/2016 - 3:15pm
This unnuanced point of view has been swirlling around nonblack communitiies throughout Michigan since I was teenager in the 1980s in Oakland County Any attempt to explain external factors that impact cities like Detroit are usually dismissed with " thats excuse making" " and " stop playing the race card" all the while systemic racism has impacted cities all the time. Yet, the people speaking the loudest about " its not racism" are white. Funny that This attitude is esp prevelant among conservatives, but not limited to it. The attitude is SO prevelant that it actually defends and reinforces structural/ systemic racism. It seems like punching down on black cities is okay.. Buy when folks in rural Michigan are struggling there is much more sympathy. Why did we bailout Kalkaska? The suburb I live in puts out more money in funds for state education that it gets back. Rural school districts get help from the more densely populated areas, but vote conservatuve, talk about government overreach , want lower taxes.. And seem unaware of how much assistance they are getting This attitude is especially
Fri, 02/12/2016 - 2:00pm
I found your comments about a "Detroit-Ann Arbor Corridor" to be "too-little-too-late." Oakland County has already created Automation Alley and almost all high-tech ventures chose to locate there. We can't create a Silicon Valley clone in Wayne or Washtenaw county when one already exists a few miles to the north
Martin Magid
Sun, 02/07/2016 - 12:41am
Thanks to both Mr. Farley and to Commenter "MG." If there are enough of us perhaps there is still hope for Michigan.
Chuck Jordan
Sun, 02/07/2016 - 11:42am
The only events left out of Mr. or Dr.? Farley's analysis are the white flight to suburbia in the 70's and the rise of Charter schools and schools of choice. These two events and decreases in jobs for high school graduates have led to minority enclaves/ghettos with not enough of a tax base to support themselves. Poor decisions are certainly part of the mix, but the choices of urban areas and school districts have been limited too. I also appreciated MG's analysis.
Jim H
Sun, 02/07/2016 - 1:52pm
KG-1 is spot on. The beauty of devolved democracy is that if policies fail at the local government level you can easily identify and reach the decision makers you voted for and hold them accountable. If you fail to take the appropriate action, and not throw the bums out, then you you are largely responsible for the pickle you now find yourself in. Local government, especially, requires responsibility on the part of its citizens. Yes, the Michigan economy has badly faltered over the years, and yes, this has had major financial impacts on many local governments around the state. But nonetheless, many communities around the state who have faced similar economic upheavals have bucked up, laid off major portions of their workforces, cut salaries and benefits and reduced services to accommodate the ongoing problems. I can appreciate the need to bring in a financial manager - especially if state dollars or programs are being tapped to help out the local community, but still it is very tempting to agree with those who object to having a financial manager - 'Fine, you don't want one - we don't either. Figure it out yourselves!' Finally, KG-1's reference to democrats has some resonance. This is the party after all that finds spending money much easier that restraining these impulses. There is always that money tree in the back yard that will come to the rescue after the coffers are empty. Until then, happy times!
Mon, 02/08/2016 - 3:27pm
What a very predictable comment. It amazes me how people believe that a city is immune from state and federal laws. Shuttering mental health clinics at the state level, three strike laws, the war on drugs, mass incarceration , NAFTA, for profit charter schools. Of course, I would be rich if I had a $1 for each time I heard Democrat led cities are an example of why Democratic policies don't work. Please, the next time someone says that, have them name the top 25 thriving large cities. What party is in charge. Overwhelmingly, its a Democrat. Even in red states. Back in Michigan, gerrymandering, and voter suppression. Quit stepping on peoples necks abd them blame them for putting their neck under your boot
Sun, 02/07/2016 - 3:24pm
Could the demise of the family structure have anything to do with it? ddm
Mon, 02/08/2016 - 7:34am
Bear in mind the law of unintended consequences will lead to additional rules in both state and federal legislatures. That is the rights of the majority will require the majority of the minority before a law can be enacted .
Mon, 02/08/2016 - 3:50pm
I disagree about the 1 percent tax for local government, for most can't seem to save it for a raining.
John Gillis
Mon, 02/08/2016 - 7:23pm
Unintended racial consequences. I guess nobody realized tha 89% of Detroit was black, and that the city, the schools, and the unions have been predominantly run by black people for a very long time. And you know what? There were in fact no unintended or intended racial consequences. The author of this vanilla creme article doesn't have a clue. He's like the equivalent of a white feminist in the opinion arena. We should have policies to prevent needing emergency managers, he says. Really? Impose miillages? Sure, all those white people up north will be glad to pony up. Why didn't anybody think of that before? Oakland County alone could handle it. Ask Brooks. Remember when he didn't want to pay more for the water he was getting from Detroit. Ripple effect maybe?