Commentary: Detroit's dysfunction leading to emergency financial manager

Dec 6, 2012

I cannot remember any lame duck session of any legislature where lawmakers were trying to do as much in as short a time as they are in Lansing now. They are trying to grapple with vast changes to personal, meaning business, property tax in this state.

They are working on major changes to Blue Cross-- a new regional transportation system for Metropolitan Detroit.

Some vast war over right-to-work legislation is increasingly likely. And now it seems that the lawmakers will be asked to pass some new version of an emergency manager law.

They want to do all these things before Christmas, which is a pretty tall order. And getting the emergency manager piece done just took on new urgency. For yesterday, State Treasurer Andy Dillon pretty much announced that the state will appoint an Emergency Financial Manager for Detroit next month, ending the failed consent agreement experiment.

Technically, all that happened was that the treasurer said the state expects to begin an intensive, 30 day review of city finances, the necessary first step on the emergency manager road.

Dillon, who was the Democratic Speaker of the House before joining the Snyder administration, said simply “there’s been a further deterioration of finances since I last met with the city.”

He added that as a result, “we have to move more quickly than we are currently moving to resolve this.”  His statement, was, of course, a considerable understatement.

Thanks to the inability of Detroit’s leaders to get their acts together, everything in Detroit, not just the finances, have continued to deteriorate since the consent agreement went into effect in April.

There is no money. The murder rate is up and the city council and the mayor are essentially not talking to each other, which may not matter much, because they clearly can’t agree that the sky is blue.

Nor would this council agree to anything except somebody dumping a pile of money in front of them to spend as they wish.

This is not going to happen. Instead, the city will get an Emergency Financial Manager, and Detroit’s elected officials will suddenly become figureheads.

Some people, by the way, may be confused about this. Didn’t the voters repeal an emergency manager law last month? Yes, they did. That was the much tougher emergency manager law enacted by the legislature last year. Under that law, managers could do things like arbitrarily break union contracts. But its repeal meant the old emergency financial manager law went back in force.

And if one of those is appointed, she or he will still have complete control of city finances, though not the ability to break union contracts. However, the governor is now working on new legislation to give emergency managers more power.

You can now safely bet that Detroit will have an emergency financial manager of some kind before the end of January.

Then, the real question becomes whether they can help the city avoid landing in federal bankruptcy court, or whether their task is to lead the city into a bankruptcy filing. If that happens, Detroiters can probably kiss a lot of things they’ve taken for granted good-bye, including pensions and health care for retired city workers.

The months ahead are going to be very interesting times. 

Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.