Michiganders say emergency managers wield too much power

Michigan residents look with deep suspicion on the state's emergency manager law and think it should be reformed, according to a Center for Michigan report released today.

Entitled “Fractured Trust: Lost faith in state government and how to restore it,”  the report found that 81 percent of roughly 2,750 state residents engaged in a series of community dialogues across Michigan in 2016 had “low” or “very low” trust in the emergency manager system.  A separate telephone survey of 2000 residents found nearly two-thirds had similar lack of  trust in the system.

Support for changing how emergency managers operate was substantial, with more than half the people interviewed in community conversations approving of “more checks and balances” and “shared decisions” between emergency managers and local officials. The views were collected over nine months in 2016 at 125 town hall meetings and in a phone survey of 2000 residents across the state.

It is the Center's sixth annual statewide public engagement campaign, with the focus in 2016 on the level of trust residents have in state government to perform a broad range of critical functions. The Center for Michigan, an Ann Arbor-based nonprofit, is devoted to increasing public understanding and involvement in state policy issues. The Center is also home to Bridge Magazine, which conducts independent nonprofit journalism across the state.     

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The findings of broad public opposition to the state’s emergency manager law  comes a month after a University of Michigan survey found a majority of officials from 1,300 cities, counties, townships and villages also favor overhaul of the law.

The Center gathered public sentiment on the law through much of 2016, a time of extraordinary local and national attention focused on Flint, as it became clear that state emergency managers were largely responsible for decisions that led to toxic lead entering the city’s water supply. It was a state-appointed manager who first approved plans to switch the source of Flint’s drinking water to the Flint River, without ensuring the water was properly treated. The switch was made to save money for the impoverished city.

As a result, thousands of children were exposed to toxic levels of lead and, nearly three years later, Flint residents must still rely on filters and bottled water. As Bridge has revealed, the water switch also likely spawned an outbreak of Legionnaire’s disease in the Flint region that killed at least 12 people and sickened scores more.

Chris Kolb, a former state representative and president of the Michigan Environmental Council, said state residents' opposition to the emergency manager law is hardly surprising.

Kolb was part of a five-member Flint Water Advisory Task Force that issued a March 2016 report that traced much of the blame for the crisis to the emergency manager system.

“Flint was under the control of state-appointed emergency managers, who made key decisions that contributed to the crisis,” the report stated. “Because of these two facts, the state is fundamentally accountable for what happened in Flint.”

Among other recommendations, the report called for “measures to compensate for the loss of the checks and balances” under the law and provision of an ombudsman in state government to ensure emergency management takes into account local concerns.

“When things went wrong there, nobody had anywhere to go with their complaints. It really removed the people from any decision making,” Kolb told Bridge.

Michigan has had an emergency manager law since 1988, though it was strengthened in 2011 before state voters rejected the law in 2012. Gov. Rick Snyder then signed legislation weeks after that rejection that restored most of its provisions and barred voters from participating in a future referendum that would rescind it.

The beefed-up law grants state-appointed emergency managers sweeping authority to assume powers held by mayors and other locally elected officials in financially troubled cities or school districts. Emergency managers were given the power to sell property, change labor contracts or eliminate entire departments in struggling cities and school districts, and is considered among the most sweeping in the nation.

In the past 15 years, a dozen municipalities or school districts have come under emergency management in Michigan, including, most famously, Detroit, which eventually went through municipal bankruptcy proceedings under emergency manager Kevyn Orr.

The state’s increased reliance on the EM law accelerated with a decade-long economic slide and steep unfunded pension and retirement health care debt that plunged many cities and school districts into severe financial duress.

By and large, emergency management has landed on communities with large minority populations, leading some to conclude its application is discriminatory.

That racially tinged history is reflected in comments collected in the Center's community conversations, held from March through December of last year.

“What concerns me is the emergency managers have been primarily used in minority situations,” said one participant. “Other towns are in trouble but they don't force the emergency manager on them. Michigan needs to take a long, hard look at the racial implications.”

The Michigan Civil Rights Commission echoed that concern in a report it released in February that concluded the law is intrinsically discriminatory, deepening the disparity between poor urban and affluent suburban communities.

“If you live in Michigan, there is a 10 percent chance that you have lived under emergency management since 2009. But if you are a black Michigander, the odds are 50/50,” that report found.  

“In short, the EM law as applied far too often addresses the problems of already financially stricken governments in second-class communities, segregated based on race, wealth and opportunity, by appointing an emergency manager whose toolbox is filled with short term solutions that are contrary to the long term interests of the people living there.”

Some residents participating in the Center’s community conversations said they were concerned the emergency manager law undercuts basic democracy.

A Flint resident stated: “The vote is being taken over by emergency managers. It takes away confidence as an American citizen, and it hurts even more as a veteran because it needs to be proven to me that my vote counts.”

Another stated: “I don’t endorse the emergency manager system, as much as I understand there’s a need for something to happen when local elected officials fail. But I just can’t get behind a solution that is this undemocratic. In a perfect world, it could work, but we will never be in that perfect world. So I feel like we have to look to something else other than the emergency manager system.”

Democratic state Senate Minority Leader Jim Ananich of Flint said the law needs reform. “It is not a success-based model. It is a failure-based model,” he said.

Ananich said he favors some sort of “early warning” system in which signs of financial stress in a city or school district would trigger assistance by outside financial experts. He said he would back use of an emergency manager only as a “last resort.”

“There are much more positive and supportive ways to do it,” he said.

In Detroit, however, many credit the emergency manager law with helping Michigan’s largest city pivot to a financial recovery. Advocates of the emergency manager’s role in Detroit say it played a pivotal role in the so-called grand bargain that sped that city's exit from bankruptcy while largely protecting retiree pensions and sparing the prized art collection at the Detroit Institute of Arts.

Consummated under emergency manager Orr, the deal pledged more than $450 million from philanthropic and DIA benefactor sources and nearly $200 million from the state to the city, while creating a panel to oversee city finances for 13 years. The deal spared Detroit from what could have been draconian cuts to pensions and city services under authority of the bankruptcy court.

In 2015, retired federal judge Steven Rhodes – who presided over the bankruptcy proceedings – gave praise to Orr as a key player in the bankruptcy outcome.

“He had the single most complex job in this case. The challenges he faced were enormous,” Rhodes said.

While critics continue to call for reform of the law – or its end – a federal appeals court ruled last September that the state of Michigan can continue to use emergency managers to solve local financial crises.

Ari Adler, spokesman for Gov. Rick Snyder, said the governor “is always open to discussing revisions to programs if people believe there are ways to improve them.”

He added: “The emergency manager law in its current form has worked well for residents in many instances, including in Detroit...but the governor isn’t opposed to making improvements. If the Legislature were to take up bills addressing changes and send them over to Gov. Snyder, he would review them with an open mind.”