Commentary
1:25 pm
Thu March 10, 2011

Emergency Financial Managers

Nobody in Lansing was neutral yesterday when the Michigan senate completed passage of new, tougher Emergency Financial Manager legislation on a straight, party line vote.

State Senator Phil Pavlov said this is needed to maintain “vital services, such as public safety and education,” when a city or a school district is in desperate financial straits.

This reform, he said, is necessary to allow steps to be taken “to protect public interests and the public’s money and strengthen local control and accountability.” His fellow Republicans all agreed.

But if you talked to any of the Democrats, they sounded like this was the equivalent of Mussolini seizing power.  “An unfair and unjustified power grab,“ Senate Minority Leader Gretchen Whitmer called it. One of her colleagues said it went way too far, “and was going to damage our communities and our schools.”

Well, you could say that it is nice to see that our time-honored tradition of bitter partisan divisions is alive and well, but I think the opposite. We’ve had four sterile years of that in Lansing. I think we’d all be better off if this could have been a bipartisan bill.

It’s also frustratingly clear that in the past, some emergency  managers in places like Pontiac and Hamtramck could have used  more authority. Robert Bobb needed to be able to tackle academic reform in the Detroit district; the courts said he couldn’t.

Now, his successor will have that power. Democrats are mainly afraid of provisions in the bill that would allow emergency managers to void contracts and ignore collective bargaining agreements if necessary. EFMs can even dissolve a municipal government.

Democrats rightly fear this could be the death knell for public employee unions in such cases. To be sure, the majority Republicans seemed uninterested in even attempting to compromise or win over Democrats. However, here’s something we might ask the indignant minority party: Where have you been for the last several years?

What’s clear is that a lot more school districts and municipalities are likely to have to endure emergency financial managers, or EFMs for short.

This has been clear to everyone for some time, and it has also been clear that the old law was inadequate. Did the Democrats propose changes last year, when they controlled the governorship and the state house? Did they suggest conducting a review of Detroit’s troubled finances?

They did not, clearly for political reasons. They did nothing, any more than they attempted to address the state’s deep-seated financial problems. Now, the balance of power has shifted.

What’s needed now is a little more common sense and a little less hysteria. As I read this law, EFMs will now be appointed by the state treasurer, not the governor. And the man now in that job, Andy Dillon, happens to be a Democrat. He also has the ability to grant local officials most of the powers emergency managers have.

If emergency managers are appointed who gleefully begin dissolving contracts for sheer ideological reasons, there’s bound to be plenty of public criticism, and a backlash, as witness Wisconsin.

What’s needed now is the means and goodwill to keep financially strapped governments functioning, and, especially, to educate kids, no matter what.

If everyone keeps that in mind, we’ll all be better off.