From the Daily: Misguided management

BY THE MICHIGAN DAILY

Published March 10, 2013

On March 1, Republican Gov. Rick Snyder announced his intentions to appoint an emergency financial manager for Detroit as a last resort measure to address the city's grave financial problems. Given the city’s struggles with various problems ranging from its depleted tax base to a crumbling infrastructure, it’s obvious that substantial changes must be made. That being said, all potential solutions should have been considered before giving broad powers to someone from outside the current city government. While Detroit is in desperate need of repair, Snyder’s decision to appoint an emergency financial manager is a shortsighted move that subverts the democracy of Detroit's institutions and residents.

Detroit has been unable to effectively collect revenue from its taxpayers. The constantly decreasing population has only added to this problem — a decade ago, there were over a million residents; today about 700,000. The city also has a long history of inefficient government and officials misusing funds — notably former Mayor Kwame Kilpatrick. State money will be essential to funding programs that can turn the city around. But bringing in someone with total control over the finances is a step too far.

It may seem that bringing in an emergency financial manager would be the quick fix to a public sector plagued by more than $14 billion in long-term liabilities. However, other cities in Michigan, such as Allen Park, Pontiac and Flint have emergency financial managers and have shown little improvement. For example, in 2002 Flint went into a financial emergency and Ed Kurtz served as the manager until 2004. Kurtz left Flint in 2004, claiming it was no longer in an emergency and that there would be a $6.1 million budget surplus in 2005. However, the prosperity didn't last and the city struggled with a deficit of $6.8 million by 2008. Once again, Snyder appointed Kurtz as Flint’s emergency manager in 2012. The Flint City Council has proposed to move away from having an emergency financial manager despite still facing huge deficits and a crumbling infrastructure. Detroit is much larger than these cities, and it’s unclear whether an emergency manager would prove effective in a city — a serious gamble.

One of the bigger concerns of the emergency financial manager is that it strips away the autonomy of Detroit and gives power to an official who most likely doesn’t have the same level of knowledge of the city as the citizens of Detroit, who have first-hand accounts of the changes that are needed. With this change, the citizens will no longer have a say in the way their city is governed. The appointment of an emergency financial manager was a short-term and desperate solution, as exemplified by Flint. Going forward, whoever the appointed emergency financial manager is must work closely with the mayor and city council.

Without action, financial failure for Detroit is imminent. Clearly, Snyder had to step in and do something. However, his choice to appoint an emergency financial manager hasn't been met with complete praise, as evidenced by Proposal 1 — in which giving expanded powers to an emergency manager was voted down — and the recent controversy surrounding this decision. In order for the emergency financial manager to have success in Detroit, they must work closely with the people that know Detroit best, instead of making rash decisions that may harm the city in the long-run.