Emergency Manager Law
Thu July 17, 2014
WSW: Could Michigan Improve Its Emergency Manager Law?
Bridge Magazine finds that Michigan's Emergency Managers Law is one of the most aggressive of its kind in the nation.
Reporter Chastity Pratt-Dawsey told WMUK's Gordon Evans that Bridge decided to examine the issue of the state stepping in to address financially-strapped local governments because the number of cities, townships and school districts under an emergency manager has grown from six to 17 in the last two years. Michigan gives Emergency Managers broad powers to address those problems. Pratt-Dawsey looked at how Michigan's law has unfolded, and how other states address financially troubled municipalities.
The 17 local units of government under state control are at various stages in the process. Benton Harbor has moved to a transition advisory board, which is supposed to be a step towards local control. That board still approves or rejects budgets approved by local governments. Pratt-Dawsey says the boards don't have a time limit. They remain in place until the Treasury Department and the Governor's office agree that the local government can "fly on their own."
Five cities have come under an emergency financial manager, went through drastic changes, and returned to local control, only to have the state step in again. Pratt-Dawsey says that's crucial at a time when more cities have an emergency manager and more cities are candidates to have a manager appointed.
Pratt-Dawsey says having an emergency manager appointed is an emotional issue for that community, and residents often see the state as taking over. She interviewed former Benton Harbor Emergency Manager Joe Harris. He discussed the battles with elected officials in the city. Harris says the best way to prevent a municipality from falling back under an emergency manager is for the state to act quickly when a financial emergency is evident.
The strong emotions related to the emergency manager law are driven in part by race. Most of the communities that have come under an emergency manager have had a majority of African-American residents. Defenders of the law say the decision to appoint an emergency manager is made based on numbers and finances, not race. Pratt-Dawsey says there are legal challenges to the current law. That's in part because voters rejected the new emergency manager law in the 2012 election.
Other states also have laws on the book to address troubled cities. Pratt-Dawsey says some of those states get involved earlier in the process. She says North Carolina has a local government commission. Pratt-Dawsey says the state has more oversight of local government operations in North Carolina. She says that can help short-circuit financial emergencies.
Pratt-Dawsey says most experts believe the key to a successful transition back to local control is including local leaders who will be in charge after the emergency manager is no longer there. Pratt-Dawsey says the emergency manager in Allen Park, Joyce Parker, is working to include community leaders in fixing the problems in their community.
Asked if carrots and sticks could be used to prevent a city from falling into receivership, Pratt-Dawsey says other states "hover" over some local governments "like a helicopter parent." But she says there is the threat of a state take over of those communities. Pratt-Dawsey says a new state office of fiscal responsibility could be a step in that direction, but she says it remains to be seen how effective that is.