Proof that Michigan’s Emergency Mgrs don’t work: 3 cities that had them in financial trouble again


One of the main points I have raised repeatedly since the passage of Michigan’s Emergency Manager law, Public Act 4, is that the imposition of an Emergency Manager (EM) does little, if anything, to solve the underlying problems that bring municipalities and school districts to the crisis point where an EM is deemed necessary.

With Joe Harris set to depart Benton Harbor sometime in the first few months of 2012, for example, what has he done that will prevent that town from simply returning to the same place it was when he entered the scene? The answer is, of course, little to nothing.

It is my contention that systemic problems plaguing Benton Harbor and other Michigan towns & school districts that are staring down the barrel of the elimination of local democracy are not solved by an EM. Widespread poverty, diminishing revenues both from a shrinking tax base and a Republican state budget that robbed them of revenue sharing and school fund monies, poor education and a lack of trained leaders coming up through the system all conspire to keep these towns and districts from extricating themselves from the problems they face.

It’s worth looking at some of the Michigan cities that have had EMs in the past. First, let’s take a look at Highland Park. Highland Park first had an EM appointed under Republican Governor John Engler in 2001. The first EM Arthur Blackwell was later replaced after it was discovered that he had been taking unauthorized payments for his services after publicly agreeing to an annual salary of $1. A jury determined this past summer that he would have to repay over a quarter million dollars in back pay he paid himself.

So, what has become of Highland Park since 2009? Well, sadly, it is back in the red again. In August of this year, DTE, the electricity supplier for Highland Park, took out 1,400 street lights because the city owed $4.5 million on its power bill. This is simply a symptom of a much greater problem: Highland Park is once again in debt. Soon after he was elected this past November but before he was sworn in, Highland Park Mayor-elect DeAndre Windom learned that Highland Park is being considered for the imposition of an Emergency manager for second time.

The city of Hamtramck also had an EM between 2000 and 2007: current Pontiac EM and Mackinac Center adjunct scholar Louis Schimmel. What happened after Schinmmel left? Hamtramck asked to file for bankruptcy just three years later.

What about Flint? Flint had an EM between 2002 and 2004. As of December 1st of this year, Flint has yet another Emergency Manager.

These are clear and obvious examples demonstrating exactly what I have been arguing all along: balancing the books in cities dealing with desperate circumstances is simply not enough. We need a new model, a new paradigm for solving these complicated problems.

If you listen to Michigan’s Republican leadership and their brain trust, the Mackinac Center, the blame for these cities’ and school districts’ problems rests almost entirely on the unionized public employees. However, a simple review of the facts proves that this is patently false. The problems were decades in the making and they have far more to do with the flight of manufacturing jobs and the immobility of the poor than they do with the wages and benefits of unionized public employees. The push to eliminate public employee unions or at least strip away enough of their power to make them useless is simply a side benefit for those who want these unions killed off for good.

When you look at the companies that provided the training to EMs earlier this year, you see a laundry list of businesses that serve to benefit significantly from outsourcing of services. This, too, is no accident and this, too, is another side benefit.

But, make no mistake: Emergency Managers do not solve the systemic problems that bring cities and school districts to the crisis point. They are simply a band-aid on a gaping wound, temporarily staunching the flow while private businesses reap profits and anti-union forces play out a long-awaited plan to rid the state of public employees unions. Given the history of the Emergency Manager/Emergency Financial Manager system in Michigan, there is no reason to believe that they will provide the meaningful solutions that our cities and school districts so desperately need.