Editorial: Consent agreement best tool for Wayne County
Wayne County Executive Warren Evans is taking the right step in inviting the state of Michigan to review Wayne County's finances, leading to what he hopes will be a consent agreement that wipes away the county's budget deficit.
It's the exception for politicians to ask the state to intervene in a community's finances. But the emergency manager law was intended as much to be a tool to help local leaders solve their fiscal challenges as it is a cudgel to force them to do so.
Evans sees it as the best tool to keep Wayne County's fiscal ship from sinking any lower. His letter to the state today will ask for help, not a takeover.
Had Detroit taken this step much earlier, it might have avoided an emergency manager and bankruptcy. Evans, who says the county is not near insolvency, still wants the books balanced by Oct. 1, the start of the next fiscal year, and recognizes that won't happen without extraordinary measures.
Specifically, he hopes a consent agreement will provide leverage to wring concessions from the county's labor unions.
Wayne County has an annual structural deficit of $52 million. Evans has crafted a recovery plan to eliminate the shortfall. His proposal requires roughly $22 million in contract concessions from labor unions to work.
Those givebacks in pay and pension and healthcare benefits are not likely to come voluntarily. A consent agreement with the state that requires the restructured contracts would give Evans a hammer in negotiations. The unspoken threat is that if the consent agreement fails, the harsher step of emergency management would be next.
Michigan's emergency management law has not yet been used by a county. The governing structure of counties makes the law's effectiveness less certain since counties have more than one autonomous elected executive. While Evans is responsible for the county's budget, he has little control over the spending of the elected prosecutor, sheriff and courts.
Evans says, however, that ongoing talks with Sheriff Benny Napoleon are resulting in spending reductions, and that Prosecutor Kym Worthy is within her budget. If that holds, the consent agreement will be easier to execute.
Opponents of contract concessions, including the unions and some county commissioners, are asking instead that the county go to its voters with a tax hike request.
That's fantasy. Wayne County taxpayers have been so abused by corruption and mismanagement that they are not likely to dig deeper in their pockets to bail out unions that have been an equal partner in the county's fiscal ruin.
Aside from its operating shortfall, the county also has an accumulated deficit of $150 million, and needs an additional $40 million a year to bolster its underfunded pension system.
On paper, Wayne County's finances look every bit as dismal as did Detroit's before it was taken over by the state.
By inviting the state in rather than waiting for the imposition of emergency management, Evans is giving the county an opportunity to fix itself. That's the better route for both the unions and taxpayers.