For those of us who missed it, a resolution has passed the Michigan senate that allows the governor to declare a financial emergency for any municipality in the state and appoint a financial manager. The appointed manager then has broad powers to terminate any current contracts under force in that municipality, remove any elected officials and even dissolve the incorporation of the municipality in order to combine it with another.
Does that sound a little unreal? Further to that, the Michigan house has a similar bill granting the governor the same powers except that the financial manager does not have to be an individual, it can be a corporation.
So this means that no matter who was elected in any town or city in the state, the governor through the “financial manager” can remove them. Depending on the final version of the law, the financial manager could also be a corporation, like say, Dow Chemical which has quiet a few sites in Michigan.
This also means that union contracts can be cancelled, financial contracts and loans can be cancelled, private agreements with contractors can be cancelled. In short whole towns can be dissolved along with all of their obligations and re-allocated at the choice of the Governor. This includes eliminating school boards, redesigning school curriculums and eliminating sitting city councils
In theory it means that any taxes paid by the residents of a specific town for specific use can also be reallocated to any use the financial manager sees fit. The manager may also privatize any services or simply eliminate them, without any due process or recourse by the citizens.
This is being touted as an emergency powers tool due to the financial crisis, however there is no definition of what constitutes a municipality’s financial emergency, only “trigger events” such as missing a payroll. What a trusting bunch they are in Michigan. They really must think the world of their Governor. The only proposed amendment, to limit the salary of the financial manager, was narrowly defeated. That’s nice, isn’t it? That way, the poor be-trodden “Financial manager” who doesn’t seem to have a set term, will surely have enough to keep body and soul together.
I think my favorite quote from the Debate in the Michigan senate was that of Democrat Gretchen Whitmer of Lansing Michigan:
“This bill represents bigger government, more bureaucrats (and) less accountability and less transparency,” Whitmer said, sending up a cheer from opponents outside the chamber that could be heard on the Senate floor. “Where the heck is the tea party now?”
They’re right there with you Gretchen, right there with you.
From The Detroit News: http://detnews.com/article/20110310/POLITICS02/103100375/Financial-manager-bill-passes-Michigan-Senate#ixzz1GElIPcWv”
Copyright Prentiss Gray 2011
Prentiss Gray is a writer and columnist and currently writes the Domesti-Tech Blog for Gannett. He can be reached through his website at www.prentissgray.com
Prentiss Gray
Prentiss Gray is a writer/columnist/blogger from New Jersey. After 27 years as a Information Systems consultant and the death of his wife of 21 years, he returned to his roots as a writer, creating the national column Adventures of the Lone Dad/ Daddy chronicles. He now Blogs for Gannet on domestic technology, and writes feature pieces and stories for general publication. He is a member of the American Society of Journalists and Authors and contributes to Bloomberg News, Daily Record, Gannett and the Tribune Syndicate.
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This situation as you describe it seems extreme. We have a general problem with cities, states and at the federal that can only be described as a Ponzi scheme. Cities and states spend monies they don’t have in hopes of the next tier up in the ladder will bail them out. If the state does not bail out the city, and the government the state, it comes to light that the irresponsible spending at whatever level means 1) bail us out or 2)we default. It is going to be a tough and painful job of reigning in spending and balancing that with doing the honorable thing.
I was once a Director with a small corporation that was forced into bankruptcy by the EPA shortly after I came on board. The bankruptcy court appointed a “manager” whose job and powers were virtually unlimited in deciding when and who to lay off, restructuring debt obligations or forcing vendors to sue for obligations they were rightly owed. It was ugly, and sounds akin to what you are describing.
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Is there a place we can go to read the text of this law?
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That does seem extreme. I really would like to read the bill/law. Prentiss, we may really agree 100% on this!
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Here is what the Wall Street Journal had to say about it
http://online.wsj.com/article/SB10001424052748703752404576178423994325018.html
I think that article is fascinating, and a little frightening. Wall Street lives in their own little world, they get bailed out but main street needs to do a little “belt tightening.” I wonder what the WSJ would say if the government took the money the financial institutions paid back and turned around and lent it to all the states and municipalities that need it? Especially if the government lent it under the same terms.
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One must be careful in attributing who got what. For sure Wall Street got bailed out, but then lots of money went to teachers and government employees and a lot less to job stimulation. It is a form of bribery with the unions. I give your employer money to keep you, you and the union contribute to our party and we have quid-pro-quo. The currency is votes from the unions and special considerations from the administration. Nothing new I might add.
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