By YANJIE WANG
Capital News Service
LANSING — Voters are poised the fate of Public Act 4, better known as Michigan’s controversial Emergency Manager Law.
Among the six ballot proposals to be decided in November, Proposal 1 asks voters to approve the law that authorizes the governor to appoint an emergency manager to make decisions for financially distressed school districts and local governments.
The Legislature passed Public Act 4 last year but it has been suspended pending the results of the Nov. 6 election.
Supporters of the law argue that the measure is essential to assist hard-pressed communities avoid financial ruin by temporarily superseding the authority of local elected officials. But opponents counter that Public Act 4 undermines the democratic right of citizens to choose their own leaders.
The law establishes criteria to assess a local government’s financial condition and allows appointed emergency managers to act in place of local officials. The law requires emergency managers to develop financial and operating plans, and they can modify or terminate contracts, including collective bargaining agreements and vendor contracts, until the financial emergency is resolved.
In the most serious situations, they also could disincorporate or dissolve the unit with approval of the governor and state treasurer.
Mark Skidmore, a Michigan State University professor specializing in public and urban economics, said emergency managers under the challenged law have more control in decision making to resolve long-running challenges than those appointed under a 1990 law giving them less autonomy.
Public Act 4 has a greater potential to make changes in communities than the old law, Skidmore said, but local officials have less ability to make any decisions.
For a community under financial pressure to pay for pensions and retiree health care, a long-running, chronic challenge could exist when “an increasing part of the general fund revenues go out to pay for benefits,” Skidmore said. “That means it is not going to pay for current services.”
Rep. Al Pscholka, R-Stevensville, sponsor of Public Act 4, said it was intended to help prevent municipal bankruptcy and to protect taxpayers.
An early warning system under the law helps communities take action before they lose their financial solvency, Pscholka said.
The system would give a local government time to react to its financial difficulties after a Treasury Department preliminary review that determines a financial problem exists, avoiding an emergency manager right away.
Gov. Rick Snyder acknowledged the importance of the early warning system and the expansive powers that the law gives to emergency managers as well.
“When we had an emergency manager, they didn’t have enough powers, so in many cases they could be there for a very long time. So we strengthened the power the emergency manager would have so that they can come in, do their work, finish their work and get out, and get the community back in charge,” Snyder said.
Rep. Rashida Tlaib, D-Detroit, said Public Law 4 may have been well-intentioned but it completely deteriorated the quality of services in her district and costs more in debt.
“People can’t find anybody for help. The city council doesn’t have any power to do anything because of the emergency manager,” Tlaib said.
Local officials such as city council members and school board members are worried that an emergency manager’s expansive authority could take away local leaders’ power.
Scott Kincaid, the president of the Flint City Council, said, “When you take away democracy by taking away elected authority, it is a dictatorship.”
Since Snyder appointed Michael Brown as Flint’s emergency manager in 2011, Brown has eliminated and restored salaries for the mayor and city council members, eliminated offices such as the Civil Service Commission and city ombudsman, and amended retiree insurance benefits for public officers, according to Brown’s office.
LaMar Lemmons, president of the Detroit Board of Education, said he is also concerned about the emergency managers’ power as a result of the lack of limitations.
“Under the old law, the emergency manager had to report to the elected board what he is doing. Under the old law, he was only in charge of the finances and not the entire district,” he said.
Emergency managers also have been appointed for the cities of Ecorse, Pontiac, Benton Harbor and Inkster and for the Muskegon Heights and Highland Park school districts. The city of Allen Park is in the hearing process for evaluating the need for an emergency manager.
Both Kincaid and Lemmons said they’ve seen little improvement in the financial situations in their communities under emergency managers.
Lemmons said that under the emergency manager for the Detroit Public Schools, $100 million of additional debt was created.
“We’ve got the emergency manager who has been selling all the assets and has been giving contracts to his friends and family with no apparent ratification of an actual emergency,” he said. “He has become comfortable and doesn’t plan to leave for at least half a decade.”
Kincaid said Flint also doubled its deficit during the time the emergency manager had been there.
Kincaid disagreed with Synder’s perception that more power could enable emergency managers to do their jobs and leave the community in a timely manner.
Snyder’s office said that if voters reject the ballot proposal, the more limited 1990 emergency manager law will go back into effect.
Among the opponents of Proposal 1 are the AFL-CIO, United Auto Workers, American Federation of Teachers, Michigan Education Association, A. Philip Randolph Institute and the Sierra Club.
By YANJIE WANG