Wednesday, May 25, 2011

Dissent to Grand Rapids Press’ editorial:Why emergency financial managers need broad powers

Friday, March 11, 2011 The Grand Rapids Press ran an editorial entitled: Why emergency financial managers need broad powers. Shocked by their naiveté and lack of understanding of the current statute and the legislation signed into law, I dutifully e-mailed them a dissent on March 24th in an attempt to clarify the situation and explain why the new law was not only unnecessary but detrimental to our democratic government. 

Dissent as written by me doesn’t seem to be received well by the Press editorial staff. I’m not sure they really grasp the concept of honest, fact based opposition to their editorials. As our paper it should be their responsibility to present both sides of disputed issues.  Fortunately Grand Valley Labor News is a forum open to free discussion. Therefore, I present to you my dissent to the Press’ March 11th editorial; complete and unabridged.

Sweeping authority for emergency managers is now law. The consent of the voters is eliminated.

The Press editorial while noting some inherent dangers in this law never-the-less pronounced it necessary by citing two reasons: “A financial manager needs to be able to quickly turn around a failing school district or local government. Without sufficient powers, he or she is little more than a figurehead using the same tools as the city commission or school board being replaced”.

“The penalties have to be tough to encourage local governing bodies to get their own houses in order so nobody has to come in and clean up for them. This legislation would provide strong incentive for commissions, school boards and employees to work together to stay out of receivership.”

It appears the Press like many legislators failed to read the previous law pertaining to emergency financial managers: The “Local Government Fiscal Responsibility Act 72 of 1990”.

Given the broad authority possessed by the emergency financial managers under Act 72 reasonable justification for the new law disappears in the face of the facts.  

 Under Act 72 elected officials obstructing the emergency financial manager can be removed with due process and the vacancy filled by a vote of the people. Manager’s orders bind local officials and all employees. Additionally, the manager can: make, approve, or disapprove appropriations, contracts, expenditures, or loans, the creation of any positions, or filling of vacancies; review payrolls or other claims before payment; exercise authority to renegotiate existing labor contracts and act as an agent of the local government in collective bargaining with employees or representatives and approve any contract or agreement; consolidate departments, transfer functions; appoint, supervise, and remove department heads; reduce, suspend, or eliminate the salary, or other compensation of the chief administrative officer and members of the governing body during the financial emergency; except as restricted by charter or otherwise, sell or use the assets of the local government to meet past or current obligations, provided the use of assets does not endanger public health, safety, or welfare. Topping it off the manager can place a millage on the ballot.

How much more power was needed?  Apparently, Governor Snyder thinks the power to dissolve governments and consolidate them without a vote of the people.

Communities are under financial stress largely because the Michigan Senate and House of Representatives voted to raid Revenue Sharing funds previously pledged to municipalities.

By law 21.3% of the first 4 cents of sales tax spent within a community goes to it for police, fire, and other local services. Since 2001 legislators have taken 78% of the municipalities’ share of sales tax revenue for a total of $4.2 billion. Restore those funds and most cities will be fiscally sound.

Governor Snyder placed $200 million in a new program for cities meeting his criteria on how to operate. If they “fail”, cities won’t receive funding owed them, thereby plunging them into fiscal distress and ending up with an “emergency manager” who can dissolve and consolidate local governments without a vote of the people.

Schools face a similar scenario. State funding cuts, might mean an emergency’s declared, whereby an “emergency manager” takes over, dissolves and consolidates with voters out of the picture.

Taking power from the people and placing it in the hands of a state appointed bureaucrat is offensive, an affront to democracy, and possibly unconstitutional.

Do either the Press editorial writers or Governor Snyder remember the wisdom of John Adam’s, “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”

"THIS ARTICLE APPEARS IN THE MAY 2011 ISSUE OF THE GRAND VALLEY LABOR NEWS" Rick is a Contributing Editor and as author can post this in his blog. Original can be found at 

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