Battle For Detroit: Will Michigan's GOP Governor Seize the City's Finances?
April 03, 2012
On Tuesday, while President Obama was railing against the latest House Republican budget as a “radical” plan that would provoke a survival-of-the-fittest struggle between America’s haves and have-nots, the city of Detroit was living that very nightmare. It was being dragged into the GOP’s modern version of debtor’s prison, as city officials, public employee unions, gubernatorial appointees and local courts were haggling over how the city would surrender to state control of its finances.
Detroit doesn’t get much sympathy these days. It is out of money. Just last week it had to borrow to pay workers. Many streetlights are off at night. Many buses are not running. Police take too long to respond. A report issued last week by Republican Gov. Rick Snyder’s staff says it is an economic basketcase—incompetent to control spending. However, the solution that is hanging over Detroit’s head is not just pragmatic return to somber economics; it’s the imposition of fiscal martial law. Since Michigan’s GOP-majority legislature enacted Public Act 4 of 2010, a half-dozen municipalities have been taken over by Snyder’s fiscal appointees. But none are as big as Detroit, a city of 750,000.
By Thursday, Snyder has to decide whether to assert a fiscal emergency and then allow a state emergency board to come in and manage the city’s finances as if it were a bankruptcy court: revising contracts, including union wages and benefits and reconfiguring city services. The governor prefers that Detroit’s mayor and city council do the dirty work and put their targets in writing, by signing a so-called consent decree. Starting Monday, there was no shortage of action in court and city hall. A local judge stopped the emergency board from meeting. That was appealed. Detroit City Council raised taxes but is resisting more calls for salary and benefit cuts. The governor’s staff says the city has to do more. However, Thursday is D-Day. Will the GOP take over Detroit?
What is unfolding in Detroit is a looking glass into the future of America, as brought to you by Tea Party darling governors and their right-wing brethren in Congress. They talk about saving taxpayers money and reducing the size of government, but there has been a common thread uniting the most controversial proposals from the right's newest champions: they all overreach -- and not by a little. Their agenda is not to fix what is not working in civil society. They want to starve the public sector and dismantle public employee unions. They are ideological, not fair-minded.
Detroit’s immediate prospects are only heading in one direction: toward more pain for the city’s residents, businesses and civil servants. Snyder’s arm-twisters have said Detroit has not bled enough. Behind this bullying stands a question: in a city already broke, without streetlights, without enough buses, without enough cops, how will further cuts in public programs solve anything?
Michigan’s Fiscal Emergency Rules
Snyder signed Public Act 4 in March 2011. The measure was approved but not without a fight from Democrats and hundreds of protesters at the State Capitol in Lansing, who chanted, “Kill the bill.” State employees have been battling Snyder for months. The municipal employees union AFSCME embarked on a campaign to amend Michigan’s Constitution to guarantee labor rights. At a Capitol rally last month, Democrat Lance Enderle, who lost a race for a seat in Congress, said the new law is not just about collective bargaining but “about democracy.”
To date, Michigan has appointed emergency financial managers for six communities and school districts, including the cities of Pontiac and Benton Harbor and Detroit’s Public School system. Labor leaders say the measure gives the state “dictatorial” powers over struggling cities and school districts. They blame Snyder for developing a budget with cuts so deep to local revenue sharing and schools that it is pushing many localities into insolvency, allowing a state manager to come in and end union contracts for teachers or city employees to save money. Others protest that Act 4 violates the U.S. Constitution’s Contracts Clause, which prohibits states from passing laws that impair contract rights.
The law’s proponents dispute that, saying Act 4 permits Michigan to get financial information from cities and schools sooner so it can intervene more quickly if there is trouble. And they contend some problems could be solved without even appointing an emergency manager. Republican State Rep. Al Pscholka issued a statement saying the new law “will create a more focused, preventative approach to fiscal responsibility throughout the state.” Some cities and schools boards have been a mess for years, he said. “We have allowed cities and schools to be on the verge of bankruptcy without any intervention which leaves emergency managers very few options to balance the books.”
But don’t tell that to union bosses or local political leaders. They do not see a middle path emerging. They believe they will lose the significant powers and that local workers and residents will suffer the consequences. As events unfold in Detroit, Americans will see if another Republican governor’s signature reform is a helping hand or a punitive punch: striking at political opponents, dismantling public programs, rolling back wages and benefits, and advancing an agenda that does not put people's lives first.