Emergency Manager Law, Emergency Managers — February 7, 2012 at 1:55 pm

Republicans a no-show at Emergency Manager forum in Ann Arbor


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All photos by Anne C. Savage – used with permission

On Monday, February 6, 2012, the Political Science department at the University of Michigan held a public forum/debate on Public Act 4 – the Emergency Manager law. The panelists were Representative Jeff Irwin (D-Ann Arbor); Howard Ryan, Director of Legislative Affairs, MI Department of Treasury; Conan Smith, Washtenaw County Commissioner; and Dayne Walling, Mayor of Flint.

One chair was empty – the one that was supposed to have been occupied by Mark Ouimet, a Republican state Representative (my Representative, in fact.) He cancelled at the last minute saying his presence was required “a school board meeting”. No other Republican legislators were there to fill in for him. I learned later from a Lansing insider that Ouimet was being pressured not to attend.

The forum itself was quite excellent as far as it went. There were well over 100 people in attendance, with the audience spilling out into the hallway and many standing or sitting on the floor at the edges of the room. The four panelists each spoke for about 10 minutes each, giving their perspectives on Public Act 4. After that, there was a vigorous question & answer session with the audience. Considering the high quality of the questions from audience members who were clearly students, I must say that I am impressed by the kids coming through the Poly Sci program at U of M.

Conan Smith started things off. In addition to being the chair of the Washtenaw County Board of Commissioners, he is the Executive Director of the Michigan Suburbs Alliance, representing suburban cities that ring the metro Detroit area. Smith has gone on the record as generally in support of Public Act 4 saying:

We absolutely need it. When we have cities that are in crisis, they have to get some oversight, they need to get some new tools. This legislation includes empowerment of city councils and existing city managers to tools that they don’t have. That is absolutely necessary given some of the financial situations that cities are going to be in, in particular, and townships.

He repeated this message last night though he seemed troubled by aspects of the law that give the Emergency Managers near-dictatorial powers to remove elected officials. He focused on the fact that cities must be able to deliver essential services and that the state has the “responsibility to step in when municipalities can’t deliver those services.”

When there is corruption, he said, there need to be tools to deal with that, “hopefully democratic tools”.

He also pointed to a 30-year trend of disinvestments in our urban areas that began during Governor Bill Milliken’s term. This, he said, resulted in a high concentration of poverty in the urban areas due to this disinvestment, something that “really took off during the Engler administration.” The current situation is a result of a long series of decisions over the past 2 decades.

Smith also said the new law actually makes it harder to do away with collective bargaining agreements because additional steps have been added. In the end, he said, “It’s tough to say if the new law is better or worse than the previous version.”

Smith repeated referred to “Emergency Financial Managers” and “the EFM law”, apparently unaware that the new law changes their title to simply “Emergency Managers” due to the powers they have been given that are unrelated to financial matters (educational plans, etc.)

He also said that Public Act 4 is “not being used as a hammer on communities” because only two have been added over the last year. However, this is entirely untrue when you look at the concessions being forced on public employee union members backed by a threat of the imposition of an Emergency Manager. He said implementation of the law “needs to be closely monitored” but did not say how that would be done or what remedies there might be if it is implemented in ways the citizens don’t like.

Representative Jeff Irwin explained that the GOP acted amazingly fast once they came into power. They got right to work in January 2011, he said, and began enacting Public Act 4 as one of their first tasks. In addition, they embarked on a “systematic change in tax policy…cutting taxes for businesses and increasing in taxes on individuals.”

There was, he said, consensus that the “current strategy, the current EFM law wasn’t working.” He gave the example of Detroit schools EM Robert Bobb leaving the district MORE in debt after he left than when he arrived. What was needed, he said, were “more objective triggers and the ability to act sooner before emergencies got worse.”

Unfortunately, he explained, “the list of reasons was broadened so much so as to make it completely subjective.”

“We cut revenue sharing and aid to schools at a time we were making the conditions for an EM more broad and giving them more powers. The key word is ‘help’,” he said. “But we haven’t been helping cities. We’ve been making things more difficult for them.”

Irwin also talked about how Democrats tried in vain to offer amendments that would make the law more robust but said they “were systematically gaveled down” by Republicans. For example, they offered amendments saying the EM can’t be paid more than the governor and that the EM must be a person (since the law seems to imply a corporation can be an EM.) None of these amendments were included in the final legislation.

Flint Mayor Dayne Walling gave his perspective as someone living under the control of an Emergency Manager. The day he was elected, Governor Snyder appointed an EM for Flint. His pay and benefits were stripped from him and other elected government officials, though some of that was eventually restored. He has been given specific tasks relating to community and economic development.

Walling said that, as mayor, he “made some of the hardest decisions of ANY state election official in the state.” He got double digit concessions from public employees union, closed golf courses, went through two rounds of public safety layoffs, etc. Overall the Flint city workforce is down to ~700 employees from 1200 five years ago. Yet, he said, “running our city still costs more due to a variety of labor agreements, retroactive payments, etc.” put in place by his predecessors.

“Residents are largely unhappy about having an EM,” he said. He also framed the situation with Emergency Managers like this: “We are dealing with emergencies with tools that have not been court-tested.”

One of the issues he has with Public Act 4 is that it “gives an individual more power than the governing body they replace.”

Walling talked about the way out for struggling urban cities, saying, “We need to have a discussion about how we regionalize the costs.” The broader region around these cities enjoys certain amenities they don’t pay taxes for.

Finally, Walling lamented the negative impact Public Act 4 has on citizen engagement and involvement. There’s “little incentive for people to get involved with their government,” he said, raising questions about future leadership.

The final speaker was Howard Ryan from the Department of Treasury. Ryan was deeply involved in writing the legislation that became Public Act 4. He said Republicans “knew they were going to be dealing with things they had never seen before with a tool that wasn’t flexible or facile enough” to deal with them.  “The biggest problem we face is our cost structure,” he said. “When we asked the question ‘what do we do?’ the answer was ‘you need the ability to deal with the cost of the labor agreements’.

Ryan said Public Act 4 “is intended to give the local units of goverment the flexibility to deal with things earlier in the process.” He also spoke of “the need to invigorate [cities’] balance sheets. This had to happen quickly, he said, and they “didn’t have time to spend time discussing it.”

Claiming that EMs “have had good relationships with local officials by and large”, he said they are better than a federal bankruptcy judge can be more eviscerating than an EM. Emergency Managers are “kindler and gentler” than bankruptcy judges.

Ryan also derisively said he “chuckles” when he sees how the Emergency Manager law is portrayed in the media.

Following their remarks, there were dozens of questions asked by members of the audience. They were asked about the undemocratic nature of the law, why there was focus only on cutting costs and not on raising revenues, and what creative approaches could be used besides focusing almost entirely on stripping away wages and benefits from city employees.

The panelists talked a great deal about spreading out the costs (and benefits) across a broader region than just the city. Because of Michigan’s unique reliance property taxes, a regional and more equitable way of raising taxes was suggested by Walling. Irwin said that it’s harder for Michigan cities to impose local taxes but, historically, that has been compensated for by revenue sharing. Except that now Republicans have reduced that significantly, as well. “Those promises have been broken,” he said.

Though at times he appeared to be supportive of Public Act 4, Conan Smith made smart comment about how the citizens collectively are smarter about the needs of their cities and schools than any single individual can be.

One audience member asked how they could justify the enormous salaries earned by the Emergency Managers which are generally higher than the elected officials they replace. Ryan described how very difficult the job is because “nobody likes them…nobody”. He then talked about bus drivers in Lansing he found that were earning six figures with overtime and used this to justify their salaries. After he finished, Rep. Irwin tore apart his ridiculous argument saying he thought anyone with a gun on their hip probably has a much harder job than an Emergency Manager. “How much does a starting police officer in Flint earn?” he asked Mayor Walling. “40,000? $45,000?” Saying that this is about what an officer in Ann Arbor makes, he continued that he wasn’t sympathetic to the tragic sob story Ryan was telling about how difficult the Emergency Managers’ jobs are. He also brushed off the anecdotes about wealthy bus drivers as anomalies that could hardly be used to justify high salaries for the EMs when everyone else was taking huge cuts.

I came away from the event rather disappointed. I had hoped to ask a Republican how they can justify taking so much away from cities and schools and then expect them to succeed. I also wanted to ask how aging urban areas can ever hope to attract the new economic development Republicans are counting on from their massive tax cuts when nothing is being done to help those areas become more inviting and viable.

Unfortunately, there was nobody there to answer those questions for me. In typical Republican fashion, they simply weren’t there to engage us. Howard Ryan is not a legislator and was not the person that should be defending their actions.

Michigan Republicans talk a good line about helping cities get back on their feet and getting “more robust balance sheets” yet they are doing nothing to invest in our aging urban areas. In fact, their focus on knee-capping unions, denigrating public employees and outsourcing as many services as possible seems to suggest other motives are at hand. Namely, when one looks at their actions, they appear to be doing whatever they can to drive away poor people in these cities so that they can come in, federal redevelopment grants in hand, to profit from the redevelopment of the depleted areas.

While the panelists on this forum and others such as Lansing Mayor Virg Bernero have been talking about the need for more regional agreements, besides a single carrot-on-a-stick revenue sharing incentive, nothing has been put in place by the Snyder administration to make that happen. This is something that has a real chance at helping to solve some of our state’s most vexing problems and not a single law out of the 323 laws passed last year address it in any significant way.

Howard Ryan’s comments seemed to only reinforce that there is little interest in listening to the voices of those that are fearful of what is happening and who are asking hard questions about the preservation of democratic values. It’s clear that they wanted to get things done quickly and used the “emergency” situations around the state in a “Shock Doctrine” approach to achieve their goals. This approach doesn’t allow for dialog and, with their super-majorities at all levels of government, they were allowed them to get away with it.

One of the final questions of the evening was asked by a young man who acknowledged that certain government roles are sacrosanct and inviolate. “Why is democracy not among those?” he asked.

It’s a fine question. It’s a shame there was nobody there to answer it.