Hamtramck faces an Emergency Manager. Again.


Another failure of Emergency Management

The southeastern city of Hamtramck (spelled correctly, pronounced “Ham-tram-ick”) is facing the prospect of its city being taken over by an Emergency Manager as the state has ordered a financial review team to assess its financial situation.

Hamtramck is a small city of just over 22,000. Its population is just over half (53.6%) white and has an unusually high population of Asians (21.5%.)

This would be Round Two for Hamtramck. In 2000, Governor John Engler installed an Emergency Financial Manager, a familiar player Louis Schimmel. Six years later, books balanced and financial crisis “solved”, Schimmel left and, in 2007, the city was once again back in charge of its government.

However, that didn’t last long. In 2010, facing continuing budget issues, Hamtramck asked the state to be allowed to declare bankruptcy. They were denied.

Today, Hamtramck is still in trouble:

By 2012, the city faced a $3.5 million deficit and began a series of measures, including demands for concessions frompublic safety workers, talks with the treasurer’s office and the publication of an independent audit. So far this year, the city’s deficit is $2.7 million.

The report’s findings, published in August, prompted the City Council to ask the FBI to conduct an investigation into potential misconduct among department heads over contracting of services.

Councilman Bob Zwolak said Hamtramck’s troubles aren’t unique. With a dearth of tax revenues, skyrocketing health care and legacy costs, and cities locked into union contracts, cities are struggling.

These are not problems caused by unionized workers. They are problems caused by the collapse of the manufacturing tax base, shrinking populations and a lack of investment in aging manufacturing cores. Balancing the books the first time around didn’t solve these ongoing issues and, as has been the case for the other cities under Emergency Managers, there’s little reason to believe they will be solved by a second attempt to do so either.