Flint, Detroit school crises stir fight over EM law

Leonard N. Fleming
The Detroit News

A chorus of critics argues that the troubles in Flint and Detroit Public Schools prove Michigan’s emergency manager law needs wholesale changes or elimination — an idea Gov. Rick Snyder and the Republican-controlled Legislature have resisted.

Snyder’s own bipartisan task force last month lambasted the role state-appointed emergency managers played in deciding to switch Flint’s drinking water source to the Flint River and failing to add corrosion controls that would have prevented lead contamination.

Democratic presidential candidates, members of Congress and civil rights groups say Michigan’s law that puts state appointees in control of financially distressed cities and school systems is a failed experiment. They contend elected leaders are more accountable than unelected czars.

“Flint has been in and out of emergency management, but it didn’t work,” said U.S. Rep. Dan Kildee, a second-term Democrat from Flint Township who has taken the lead in criticizing the law.

Attorney: Water crisis strengthens case against EM law

“... The notion of the emergency manager is that these cities are doing OK except that they don’t have the will to make the hard choices. The reason the national conversation is important is because there are policy choices we made as a country and certainly as a state that have completely undermined cities, local governments.”

Snyder has recently bent somewhat to the criticism, saying last week the law may need changes for more local input.

But advocates of the law say emergency managers have mostly succeeded in bringing many Michigan cities and school systems back from the brink of insolvency. They cite Detroit’s emergence from the nation’s largest municipal bankruptcy under Kevyn Orr as a prime example.

No Michigan cities are under emergency management — the last was Lincoln Park late last year — while Detroit is one of three school districts under such oversight.

“Without the emergency manager in Detroit, that bankruptcy is still going on and costing tens of millions of dollars in attorneys fees and consultants and everything else,” said state Rep. Al Pscholka, R-Stevensville. “I understand the political blame game that’s out there. And some people are taking advantage of that. But we need to look at it in its entirety.”

Snyder said last week he doesn’t “like emergency managers if I can help it,” but acknowledged concerns about making the appointees more accountable.

“I wish the emergency manager, just like I, would have asked more questions,” the governor said about the Flint crisis.

Michigan adopted an emergency manager law in 1990 that let state appointees oversee distressed city or school district finances but did not allow them to make major unilateral changes, such as in union contracts. During the last recession, as some communities piled up deficits and debt, Snyder looked for a way to give appointees more power to make changes and get finances under control.

Pscholka wrote the first major revision, Public Act 4 in 2011, that gave emergency managers broader powers that included tearing up labor contracts. Unions led a referendum against his sweeping new law, and state voters repealed it in the 2012 election.

The Legislature quickly passed and Snyder signed into law a new statute that gave communities a choice in whether to seek binding arbitration, a consent agreement with the state, bankruptcy or appointment of an emergency manager.

Despite the controversy that comes with state takeovers, communities such as Benton Harbor, Allen Park and Pontiac now have surpluses, said Pscholka, the House Appropriations Committee chairman.

‘Noise out there’

“I know there’s going to be some noise out there that says let’s take a look at it, but I’ll be glad to have that debate,” he said. “I think basically this comes down to financial accountability and responsibility. That wins the day.”

But critics say the Detroit school district has lost more students and is nearly insolvent with state-appointed emergency managers, forcing Snyder to propose a financial bailout of the district as well as a gradual return to local control to prevent an even worse bankruptcy.

Flint went through emergency management in the 2000s and had four emergency managers from 2011-14, after running several years of deficits and underfunding the pension plan. EM opponents have pointed out that emergency management has tended to occur in majority black cities and school systems with low tax bases.

Kildee said his hope is the public will “dissect the Flint situation properly” and see that “much of the failure” came from Snyder’s emergency managers.

The governor’s Flint task force report urged the Snyder administration to review the law and “identify measures to compensate for the loss of the checks and balances that are provided by representative government.” It noted the managers are not experienced in the day-to-day operations of a city, which helped lead to the crisis.

Civil rights groups like the NAACP also called for the law’s repeal in February, though Flint is back under city government control.

“It’s happening in majority African-American cities. ... We are denied the right to vote,” the Rev. Jesse Jackson said on a recent visit to Flint.

“There’s an ideological line between usurping democracy and the right-to-work laws and canceling union contracts and selling public land. ”

Emergency managers are responsible for “children with learning disabilities, other people losing their hair,” he said.

EM law defended

Despite the national criticism, Snyder spokesman Ari Adler said local governments can’t be allowed to run financially out of control and hurt their residents.

“When you are talking about communities that are struggling to survive to pay their debts, to pay their employees, to provide services to residents, they may reach a point where they cannot simply be sustained if things continue,” Adler said. “You can’t let a city go bankrupt.”

Snyder said last week he would be willing to review changes to the law based on what happened in Flint. He told The Detroit News the emergency manager appeals process “might need to be broadened in this particular case or to go forward in the future” to help elected officials challenge major emergency manager decisions.

Under the current process, challenges on major issues are appealed to a three-member board of Snyder appointees who choose the emergency managers.

Critics say the law may be effective as a last resort, but it has been used with impunity and no real input from sidelined elected officials.

“The arbitrary and capricious and authoritarian measures in that law are what brought us here,” said Lansing Mayor Virg Bernero, who lost to Snyder in 2010 governor’s race, about Flint. “... And it wouldn’t have happened with an elected mayor.”

Others say the law simply is about sidelining elected officials for bigger political gain.

“People have had a Roman ruler imposed upon them,” said the Rev. Horace Sheffield, a civil rights activist who has criticized the Detroit school and Flint takeovers. “If we can impose emergency managers, we can ... basically superimpose on liberal bastions our policies, and there’s not a damn thing you can do about it.

“And look at the utter failure. Where have they succeeded?” he asked.

“They have mismanaged the emergency.”

lfleming@detroitnews.com

Staff Writer Chad Livengood contributed.