Detroit, Emergency Manager Law, Emergency Managers — March 14, 2012 at 12:18 pm

Negative reactions to the Detroit Consent Agreement come fast and furious


A Consent Agreement by any other name is still an Emergency Manager

Yesterday, Michigan Governor Rick Snyder presented a Consent Agreement to the city of Detroit. You can read the 26-page Consent Agreement HERE (pdf). HuffPo Detroit has a great run-down of the key parts of the Consent Agreement HERE. There’s some surprisingly egregious stuff in there. Whoa.

Here’s the rather straight forward, if not harsh, condemnation of the proposal by Detroit Mayor Bing:

I’m tremendously disappointed that this consent agreement proposed by Governor Snyder does not represent the spirit of partnership needed between the City and the State to resolve the City’s financial challenges. It forfeits the electoral rights of the citizens of Detroit guaranteed by the democratic process.

The Governor has been disingenuous in his recounting of a near deal after our 4 p.m. meeting Friday. After my team and I reviewed the agreement, Andy Dillon was informed, and I, personally, called and spoke with the Governor Monday morning to let him know the proposal was unacceptable. It was the only time he and I spoke after the meeting.

He’s being disingenuous when he says this agreement leaves elected officials in charge of the City. In fact, the proposed, nine-member advisory board selects and “oversees” the functions of the City’s COO, CFO and Human Resources director – not the elected Mayor.

This proposal also circumvents the role and power of the City Council as the legislative body, waives the ability of elected officials to contest any aspect of the agreement, and dismisses the unprecedented effort and concessions made by the City’s labor unions to avoid an economic catastrophe.

And, the Governor is being disingenuous when he says he’s become frustrated by our lack of responsiveness. My team and I have been waiting for several weeks for the Governor and his team to respond to the tentative labor agreements and for an offer of tangible financial and operation assistance.

I never asked for a consent agreement. But we’ve provided the Governor with an action plan to resolve our financial shortfall, which we believe is reasonable and achievable with support from Lansing. This proposed agreement will not solve our problems.

Governor Snyder characterized Mayor Bing’s comments as “a personal attack”.

Mayor Bing had more to say this afternoon:

“I was not voted as mayor of this city to have to report to the governor,” Bing told a standing-room crowd of more than 300 students and other residents at the Wayne County Community College Downtown Campus. “The governor doesn’t run me or the people of Detroit.”

Bing likened the state consent agreement to an unlawful takeover that puts Detroiters at risk of losing critical services and pledged to come up with his own budget-cutting plan – or consent agreement – with council. He said the nine-member, unelected group of nine official to be appointed to handle the city’s finances under a the consent agreement won’t have to answer to residents who rely on services such as buses and police and fire protection.

“Why the hell would I sign it?” Bing said of the consent agreement.

Here’s Democratic State Senator Bert Johnson from Highland Park on the Senate Floor, equally emphatic in his condemnation:

While this was supposed to be a better, more palatable alternative to the appointment of an Emergency Manager, it is, indeed, just as bad as and maybe even worse. This proposal does not solve the problems of the city of Detroit. It does nothing to right the city’s financial ship. It flies in the face of fiscal responsibility. And worst of all, it is a sad, desperate attempt to continue the Republican crusade against democracy and local control…

This proposal creates a new layer of government with nine new board members earning $25,000 per year plus expenses, all on Detroit’s dime. If, in fact, any board member is terminated, they get a $1 million golden parachute, a provision the reeks of the Wall Street elitism we have had enough of in this state.

Senator Johnson was interrupted during his statement by Senate Republicans who couldn’t be bothered to listen and had to be quieted. I commend your attention to the entire video.

Though generally supportive of the agreement, Detroit Free Press editorial page editor Stephen Henderson had this to say:

“The whole idea of the consent agreement is about control and power, and this agreement would ask the Mayor and City Council to give up a lot of that,” Henderson says.

According to Henderson, the there is no difference between the advisory board and an emergency manager.

Detroit Rainbow PUSH president Rev. D. Alexander Bullock issued the following statement:

There must be an agreement that allows for the city to maintain the authority to carry out the agreement. The state of Michigan owes Detroit over $200 million in revenue sharing and it is unclear that they intend to pay. Knowing the tight fiscal situation, it is not a viable option to bring in a nine person “super committee” that will cost us $225 thousand annually. Lastly, this agreement does not protect Detroit and its citizens from the threat of an emergency manager or from having to file for bankruptcy.

Rev. Bullock, Dr. Tellis Chapman and the Baptist, Missionary and Educational Conference of the State of Michigan will hold a press conference at 4:00 p.m. this afternoon to address the emergency manager and consent agreement. It will take place at the Galilee Baptist Church, 5251 E. Outer Drive., Detroit.

Detroit State Senator Virgil Smith issued the following statement on his website:

It is clear that the Snyder administration is trying to circumvent the legislative process by any and all means. The Governor’s Emergency Manager Law is undemocratic and this agreement is also undemocratic.

The governor knows that there is a good chance the Emergency Manager Law might be overturned, therefore, on line 18 of the executive summary, they specifically state that they are attempting to “survive the potential suspension of Act 4.” Therefore, this agreement is really not a better solution than an emergency manager; it is actually worse. I urge my colleagues on the Detroit City Council to vote against this plan.

The real problem is that Detroit needs a new revenue stream. Detroit cannot continue to depend on its current revenue streams to provide necessary city services.

Therefore, I am researching the possibility of Detroit giving up a portion of its revenue sharing, which the state cuts every year, in exchange for Detroit to have the ability to have its own 1-2% sales tax.

Giving the largest city in the state its own ability to levy taxes is not new—Chicago, Denver, Los Angeles, New York, San Francisco, and Seattle all have a sales tax that is independent of the state sales tax, and these cities are destination cities for residents and tourists.

If Detroit had its own sales tax it would finally have economic independence from the state and have the ability to determine its own destiny. Also, Detroit would have the financial resources to fully fund vital services, like police and fire, especially if a percentage of the new sales tax is dedicated to police and fire.