Michigan’s New Emergency Manager Law — An Analysis

                  Fast facts about Michigan’s new Emergency Manager Law

Sorry Michiganders, it appears that your lawmakers and governor have done little more than rename the recently repealed Public Act 4 to make it appear more palatable to those that voted to strike down their 2011 version. Their working title is the Local Financial Stability and Choice Act — sounds almost nice — brings to mind terms like “enhanced interrogation” and “clear skies act”.

As previously noted, this new law actually provides no “choice” and only a false sense of “stability”. It’s little more than a corporate slash-and-burn policy called cut-back management. The intent of the law, as written and applied, is to dissolve most, if not all, of the unit of government through a fire-sale of its components, leaving the afflicted community without the basics expected of democratic civil life. Under the Snyder administration, Michigan’s cities and schools have been starved of funding while corporations are lavished with tax breaks.

Governor Snyder took the bill to his private residence to sign, and it will be delivered to Lansing for enactment any minute now. Here’s a primer on what you need to know about the new emergency manager law:

                                  A section-by-section analysis of the new law

  • Section 4 revives the sweeping catch-all provisions of PA-4, giving broad authority of the State Treasurer and State Superintendent of Public Instruction to determine “probable financial stress” including undefined “other facts or circumstances” rendering judgement under their “sole discretion”.
  • Section 4 also protects all the decisions rendered under PA-4.
  • Section 4 exempts financial review teams from compliance with both the Open Meetings Act and the Freedom of Information Act.
  • Section 5 requires the review team to conduct at least one public information meeting, but does not require the team to accept public comment of any kind.
  • Sections 5 and 6 require the review team, then the governor, to determine if there is a “financial emergency”.
  • Section 7 is where the “choice” component comes into play. The distressed body of government is offered four options: a consent agreement, an emergency manager, a neutral evaluation process, or Chapter 9 bankruptcy. The local government is given 7 days to pick their poison.
  • Section 9 gives the local unit of government the option to remove an emergency manager by a 2/3 vote after one year in office, but does not necessarily remove the unit from a state of receivership.
  • Sections 10 through 21 reinstate all the powers of the emergency manager found in PA-4, including: contract abrogation, dissolution of communities, usurpation of local official powers, suspension of wages and benefits of local leaders, sale of assets, after the fact reporting requirements, and immunities from prosecution.
  • Section 19 has one minor concession. It requires the emergency manager to allow the local unit of government an opportunity to submit an alternative plan within 10 days in the case of nullifying collective bargaining contracts and the sale of assets in excess of $50,000.  A “local emergency financial assistance loan board”, comprised of three members of the Governor’s cabinet and the State Treasurer, will choose between the two options.
  • Section 22 allows the governor to impose “best practices” on the unit of government. Those “best practices” are at the discretion of the governor and are undefined in the law. Current “best practices” include privatization, merger and consolidation, among other models borrowed from the corporate world.
  • Section 23 spells-out the terms of an appointed “advisory board” that would act to transition the unit of government through receivership. It does not allow local particiapation and is exempt from the Open Meetings Act and Freedom of Information Act.
  • Section 25 addresses specifics of the “neutral arbitration” option, including giving the State Treasurer sole authority to reject any agreement reached through this option. The process must be completed within 90 days, with no extensions allowed — no exceptions.
  • Section 30 protects all decisions and actions taken under PA-4 and PA-72.
  • Section 31 reinstates all emergency managers.
  • Section 32 gives immunity to all state-level authorities.
  • Sections 34 and 35 contain the appropriations that render the law referendum proof.

There you have it Michigan. Dictatorship — like it or not — because your elected leaders believe your vote doesn’t count.

Amy Kerr Hardin This article also appears in Voters Legislative Transparency Project and What’s Up Doc?





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7 Responses to Michigan’s New Emergency Manager Law — An Analysis

  1. M'Lynn says:

    Is it possible for “We the People” to sue Michigan government for malpractice and/or malfeasance? Any reasonable and prudent person would agree that they have not acted in good faith as representatives of their constituents.

  2. Larry coleman says:

    If it were possible it might be time not for a national tax rebellion but a state tax rebellion. We send our taxes to the state and the right wing does what it wants with our money despite the fact that because of jery mandered districts the do not even represent a majority of Michigan taxpayers. The are not only theiving our tax dollars they are stealing our democratic type of governmnet and turnining it into a Plutocracy.
    I hate the thought of it but I as a visionary can see blood in the streets if the right wing pushes their dictatorial agenda much further. The right wing is not the only side that has second amendment rights. Think about why you don’t want to go to Detroit, Flint,
    Saginaw and other places. Rick Snyder you and yours are disgraceful to your people.

  3. William Roark says:

    Oh, I think an old fashion Impeachment is in order, or Lynch Mob….. Take your pick

  4. Michael Stephen Bryant says:

    While the nation has been through two recesssions.Michigan has remained in a depression since the auto industry collapsed in the 1970’s.When the nations unemployment rate is 8%,Michigan’s is 15%.Michigan has a 40 year history of going back and forth between the two parties every ,or every other election.People seem to think they can vote against an outgoing governor who has already had the two terms,the highest allowed.rick snyder is nothing more than a dictator.His emergency manager policy eliminates Democracy and is unconstitional.One of his first moves was to eliminate a thriving movie business,getting rid of 11,000 jobs.But as bad as he is.Michigan people voted him in.And they voted in a majority of Republican’s in the State congress.Vote these people out in their next election.Rise up like we all did in the Presidential election.No more tax breaks for the richest 1% that use hidden tax breaks and tax shelters in other countries.Taking the money right out of circulation in the country.Vote.

  5. Amy says:

    So, the new law, like the old law, continues to violate the constitution by making it possible to take property by disincorporating a survey township, invalidating/abrogating deeds and mortgages, and essentially making it impossible to bring a successful eminent domain lawsuit. I continue to be amazed at how few people have caught on to this, or seem to even care.

  6. Ed says:

    Well I for one am sick and tired of listening to all this EM discussion. If elected officials of local govt and schools can not function in a financial responsible way then the state needs to intervene. It’s simple people, don’t create a financial mess with tax payer money and there won’t be a need for an EM. Classic point look at Detroit. They clearly can’t get their shit together.

  7. dennis hurskin says:

    this law is illegal and unconstitutional.

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