Interview: Do Emergency Managers actually help?

May 31, 2011

Governor Rick Snyder passed new laws expanding the power of Emergency Financial Managers, and there’s been debate over whether or not Emergency Managers are able to turnaround the municipalities and districts they’re assigned to.

Michigan Radio’s Jenn White spoke with Gary Olsen, Former Director of the Michigan Senate Fiscal Agency and Senior Policy Fellow at Public Sector Consultants. Here is the interview:

Do Emergency Managers leave their cities or districts in better financial condition?

Olson says it's a mixed bag. He points to Detroit Public Schools as an example of a district that has been in and out of state oversight programs for many years. But, was the appointment of Emergency Financial Manager Robert Bobb a success? Olson:

I think, yes, there were changes made clearly in the Detroit Public Schools. But is the budget balanced as Bobb is leaving? The answer to that is, no, although there has been certainly progress made.

Emergency Manager appointments are not permanent. Are there practices in place to help insure that a city, district or municipality will not return to a troubled state again?

Olson tells Michigan Radio’s Jenn White, other than the law that the budget has to be balanced, there is no guarantee that cities or district won’t go back to problem ways.

The hope is that this outside person can come in, show them (elected officials) that the budget can be balanced and that the lesson can be learned by the elected officials after the state gives the control back to the local officials.

Do you think Emergency Managers are able to improve cities and districts they work in, in the short-term and the long-term?

Olson says there are choices for how to balance a budget whether state or local, but that sometimes the elected officials have a difficult time making those choices for political reasons.

This is an outside person coming in and not beholden to any voters so they are going to do what has to be done politics aside. That, in my opinion, that’s the general idea behind this concept in the first place.