Despite the controversy surrounding Public Act 436 — better known as Michigan’s latest rendition of the emergency manager law — there’s an intuitive appeal to state-financial oversight for many citizens.

Alexander Hermann

Local leaders, even more than their federal and state counterparts, are incapable of fiscal responsibility — whether for political reasons or general incompetence. Or at least that’s the dominant narrative.

However, according to Jamie Peck and local leaders across the state, there’s another story worth telling.

Peck, a professor from the University of British Columbia, delivered an insightful presentation sponsored by the Detroit School of Urban Studies on Jan. 31 regarding the decentralization of austerity policies in the wake of the United States’ most recent financial crisis in 2007-2008. The Detroit School is a graduate student group at the University created to facilitate dialogues focused on the shared problems of Detroit and other rust-belt cities, in contemporary society.

To Peck, though all sectors in society have paid a price for the “Great Recession,” none has footed the bill quite like local governments. Facing declining tax revenues and pressures to tighten budgets, coinciding with simultaneous reductions in revenue sharing and other state assistances, local officials have been forced to utilize extreme measures.

This reality arguably holds most true in Michigan than anywhere else in the country. Here, seven cities across the state have been placed under emergency management since 2009. Currently, Michigan’s state treasurer Kevin Clinton is also reviewing three additional cities’ finances — Highland Park, Lincoln Park and Royal Oak Township — while contemplating further state control.

One audience member attending Peck’s talk lent considerable credibility, direct experience and additional perspective to his claims.

Karen Majewski — mayor of Hamtramck since 2005 — has as much experience as anyone working with state-appointed emergency financial managers. When Cathy Square took over as financial manager of Hamtramck last summer, it became the second time the city has entered emergency management since 2000. Majewski’s stint as mayor coincides with both crises.

“We’re stuck between a rock and a hard place,” Majewski said from the audience. “We have no room to maneuver. The forces that are controlling our financial possibilities come dictated from above.”

Majewski highlighted the sentiment that local officials are unfairly portrayed as negligent and incompetent.

“Anything that we do is the result of our mismanagement, and our dysfunctional politics,” Majewski said. “‘We can’t govern ourselves’ is the narrative that’s been put out to the people and I think that’s been accepted. And I think even at the local level it tends to be internalized that the problem is our own, and our own mismanagement, and our own incompetence.”

Despite dramatic revenue decline, especially in hard-hit cities like Hamtramck, citizens still expect the same quality of services. When those services aren’t provided, little consideration is given to local leaders’ condensed toolkit — and rightfully so.

“People deserve to live in places where their garbage is picked up, and where their streets are plowed, where their basements don’t flood,” Majewski said.

Additionally, Majewski suggested that emergency managers are, at least theoretically, responsible for correcting these perceived failings. In other words, the EFM instructs, obstructs or nannies — depending on your view — municipal officials to prevent the reoccurrence of past mistakes once governance is reverted to local control.

“If this narrative is that local government is incapable of managing itself, then in theory the emergency manager comes in and is our trainer, right?” Majewski said. “But in reality those decisions are made and those cuts are made, or those budgets are made — essentially all decisions are made without the input of elected officials and without the engagement at any level of elected officials. … In reality on the ground that mentoring and that engagement does not happen. So it really is a dictatorship.”

In an interview with the Daily last Thursday, Majewski provided her specific frustrations. In fact, simple communication with Square has been a difficult task.

“Emergency managers don’t have to answer in any way to the elected officials,” Majewski said. “Since (Square) came in on July 1st, we have seen not one single number — no budget information at all has been given to us.”

Similar issues have arisen in other cities. Emergency managers in Pontiac, for example, ultimately cut part-time city councilmembers’ pay to zero, and never restored their salaries, citing the council’s lack of cooperation. Financial managers similarly reduced Flint City Councilmembers’ annual pay from $20,000 to $7,500 without benefits.

In practice, how can this mentoring relationship develop when, time and time again, an obvious antagonism permeates city hall?

Of course, on some level local officials — usurped by Lansing in their own eyes — are reluctant to work with state appointees. But that isn’t always true.

Hamtramck City Council actually requested an emergency manager from the state, hoping the appointee would use their broad powers to put the city on better fiscal footing.

Regardless though, the future solvency of municipalities depends largely on the EFM’s ability to overcome those barriers and provide sound fiscal advice that lasts.

That instruction clearly isn’t occurring. Two Michigan cities have departed a state of financial emergency and then have later re-succumbed to emergency management — Hamtramck last year and Flint in 2011. A third, Highland Park, just left emergency management four years ago, and its re-descent seems inevitable as well.

So how do we make emergency managers under Public Act 436 more accountable to the long-term benefits of the people? Fortunately, certain barriers to improving the existing law are simple.

For one, locally elected officials should have more say in their emergency manager appointment — increasing the likelihood of creating a positive working relationship with local officials. Along those lines, it might be more palatable at times to temporarily grant local mayors themselves — still responsible to voters — with the powers of financial managers.

“The elected officials themselves in many cases have vastly more experience in city issues, in running a city than the emergency managers,” Majewski said. “(Emergency managers) may have never run a city.”

Second, the governor needs to mandate regular reporting to local officials — entirely nonexistent currently — to facilitate some level of mentorship and a smooth transition back to local government.

“One would hope that the emergency manager would be working toward a seamless transition — so that when she walks out the door, you’re already up and rolling,” Majewski said. “But that doesn’t have to happen. … We could do such a better job if we were informed and part of the decision-making process.”

And shouldn’t that be the point? Ultimately local control will be restored, ideally on better fiscal footing. Anything less is an unquestionable affront to democracy.

But even that’s been uncertain at times. In Pontiac, for example, emergency management ended last August, but oversight persisted from the “receivership-transition advisory board” with the authority to approve all municipal contracts, hiring and spending. One member of that board is Pontiac’s former antagonistic emergency manager Louis Schimmel.

Critics contend that this constitutes nothing more than continued, inappropriate and apprehensible state control — without the supposed legitimacy of financial emergency.

But what are our alternatives? Peck and Majewski think they have the answer.

Bailout.

And though the word has developed a negative connotation in our lexicon, we previously used other words to describe the same phenomenon — revenue-sharing key among them.

“Our revenue-sharing has been cut to the degree that the narrative now has become absolutely one of bailout,” Majewski said at Peck’s presentation. “Promises that were made to municipalities decades ago and then slowly clawed back — there’s no recognition that those promises were ever made. Now in order for us to reclaim those promises, we’re coming begging and our requests are delegitimized. “

“The austerity is the new norm.”

Alexander Hermann can be reached at aherm@umich.edu.

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