Detroit, Emergency Managers — June 4, 2013 at 6:58 am

Hamtramck gets an Emergency Manager, Mackinac Center thinks Detroit’s Emergency Manager is doing just fine


Another one bites the dust

Yesterday, Michigan Governor Rick Snyder declared a financial emergency in Hamtramck, Michigan. As I’ve written about before, this will be Round Two for the culturally-diverse city. They had an Emergency Financial Manager, Lou Schimmel, back in 2000 when John Engler was governor.

Hamtramck (spelled correctly, pronounced “Ham-TRAM-ick”), is rare in that the city actually asked the state to initiate the financial review process that would lead to an EM. It’s a small city with just over 22,000 residents yet it has an over $3 million budget deficit.

At least one Hamtramck city council member has blamed union for at least part of Hamtramck’s problem, what I wrote back in April is still true:

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.

Meanwhile, the homophobic, ultra-conservative American Family Association’s One News Now spent some time seeking out the opinion of an “analyst” from the Mackinac Center, asking him to weigh in on the question of “Is Detroit Emergency Manager Kevyn Orr incredibly awesome or just regular awesome?”

Michael LaFaive of the Michigan-based Mackinac Center says Kevyn Orr, the emergency, has not done or said anything that would be any more controversial than his appointment has been.

“In fact, his appointment and the subsequent work that he’s done has been sort of anticlimactic,” LaFaive tells OneNewsNow. {…}

Orr’s recent report to the state of Michigan includes retaining an outside expert to help design the restructuring of police and fire departments, slashing transportation spending while improving bus services and getting the city of Detroit out of the power supply business.

That’s something LaFaive recommended over 10 years ago in a report for the Mackinac Center.

“In 2000, we estimated that the public lighting department – the City of Detroit generates its own electricity – would be worth $300 million to $500 million if you could use the average multiple for a recently sold regulated utility as an example,” says LaFaive.

Imagine that. A spokesman for the corporatist movement in Michigan thinks it’s a great idea to sell off city services and infrastructure to a for-profit corporation. What’s next? Selling off priceless art pieces from Detroit’s world famous art museum?


LaFaive says that goes beyond what he thought could be discussed, but it is now very conceivable if a creditor were to come along and ask the city to meet them halfway on any transactions.

LaFaive explained: “The creditors may say, ‘Wait a second. You’re crying poverty, but you have billions in assets over here at the DIA. The Water Department is worth ‘x,’ the lighting is worth ‘y.’ You have got to show us that you can at least try to meet us halfway.”

It’s almost as if the only thing that shocks LaFaive about that idea is that he didn’t come up with it first.