Cash Against the Machine

An Explanation of and Work-Around for Michigan's Emergency Financial Manager Law

Governor Snyder and the Michigan legislature have come under heavy scrutiny in the past few years for appointing emergency financial managers for several Michigan municipalities that are considered high risk for financial disaster. While Public Act 436 of 2012 is the most recent standing law on the subject, the foundation for the emergency manager came about in Public Act 72 of 1990, titled the "local government fiscal responsibility act."

The aim of Act 72 to serve the general welfare of the people of Michigan appears to be genuine. In a section titled "Legislative determinations," we are lead to believe that the aim of this act is to promote "the public health and welfare of the citizens of this state" and "the interests of the people," but there is also an undertone that the state is using the distress of its municipalities in order to gain control where normally power would be denied the state. High hopes and deep suspicion are balanced expertly in this legal document.

Perhaps the most important portion of Act 436 is the list of fourteen conditions that may point to "a local government financial problem." Municipalities facing one or more of these situations will come under state review for determining whether or not an emergency financial manager is necessary. Some examples that may indicate economic instability include past due unpaid claims to creditors exceeding $10,000, large numbers of pensioners who are not receiving timely deposits, municipal employees who have not been paid for over a wee past their scheduled date of payment, and violations of a variety of government acts. In most of these situations, it is necessary for a public or private body to petition for the emergency status. This is not a situation where the gods of Olympus see that man has stolen fire and begin to enact their punishment. Rather it is like the case of suffering nomads pleading for deliverance who are given a list of commandments intended to lead them to a better way of living.

The real points of contention in the emergency manager law have to do with questions of government overreach and the imposition of highly paid outsiders who deny the people their right to self-govern. Regardless of your beliefs one way or another, these are questions that ought to be asked by any body of people who values liberty and justice as granted by the Constitution of the United States of America. I would like to reorient the discussion, however, in order to focus on another question: What can we do to help these cities?

We may have supported a Dallas hockey team, but we
supported the Detroit economy when Amy and I
wined and dined at Pegasus in Detroit's Greektown
neighborhood prior to a Stars-Red Wings game at the
Joe Louis Arena last February.

According to the Michigan Department of Treasury, there are currently nine cities and six school districts under the control of a state appointed emergency financial manager: the municipalities of Hamtramck, Detroit, Allen Park, Inkster, Flint, Benton Harbor, Ecorse, Pontiac, and River Rouge and Hazel Park, Buena Vista, Pontiac Public, Muskegon Heights, Highland Park and Detroit Public school districts. We can let state officials battle it out in order to keep these areas afloat or we can seek a way to engage the problem ourselves. The simplest public solution would be for Michiganders to buy products from the affected areas and to reroute vacations to places like "lovely Benton Harbor." This is the aim of all of the Pure Michigan radio advertisements narrated by "Toolman" Tim Allen. Perhaps it should be the aim of the citizens of Michigan.

There are certainly difficulties with any plan based solely on a spend, spend, spend mentality. The reason the state of Michigan wishes to take over city operations is because, at the bottom, many people believe that these cities are being mismanaged. While mismanaged, investing in a city might be seen as throwing money down the toilet. This is a valid point, but throwing money into a local toilet might prove more useful than investing in the immense overhead of interstate and international logistics that comes from buying American flags that are made in Taiwan. In the end, I think spending locally is the right direction because the only thing democrats and republicans at the federal level could agree on during the discussions preceding the manufactured fiscal cliff dilemma was that America needs more revenue.

Detroit, Flint, Benton Harbor and the rest need more revenue as well. Let's find some businesses that stand for what we believe in, businesses in Allen Park or Ecorse or Pontiac, and let's buy from them rather than spend all of our money on the gas it takes to deliver our goods. If you have a favorite business located in a financially devastated community, share it with your friends, share it here if you're willing. We cannot promise that the social network of elected officials will do the work we've chosen them for, but with enough cooperation we can promise that the social network of Michigan citizens can make a big difference for cities in distress.