Michigan's Emergency Manager Law Suspended

The state Supreme Court says Michigan residents can decide the controversial law's fate in November. What happens until then is less clear.
by | August 6, 2012
Lou Schimmel, the emergency manager for Pontiac, Mich., meets with his staff to discuss topics such as how the city will sell its property and reduce its electric bill. (Photo: David Kidd)

Michigan's Supreme Court ruled Friday that the fate of the state's controversial emergency manager law will be decided by voters in November; and in the meantime, it will be suspended.

But what, exactly, suspension means will be a subject of another debate -- and likely court battles.

To recap: A law championed by Republican Gov. Rick Snyder and passed by the Michigan Legislature last year gives state-appointed "emergency managers" almost unilateral authority over financially distressed municipalities in the state. Right now, four cities and three school districts have emergency managers. (View the map below to see where.)

The law, called Public Act 4 (PA 4), gives those emergency managers oversight of a municipality's day-to-day operations, including hiring and firing. They can force major changes to labor contracts, and in some cases, they can essentially cancel them. They can also set the budget, create ordinances, and sell property.

See how emergency managers have used the law in public schools.

Supporters have championed the law as a way to rein in spending that has run amock and other unsustainable financial practices in communities that are teetering on insolvency.

Earlier this year, opponents of the law who say it's anti-democratic and anti-union gathered enough signatures to put the law to a public vote. But a state elections board ruled that their petition was invalid partially because part of it was written in the wrong-size font. The state Supreme Court's 4-3 decision Friday ensures that voters will decide the law's fate after all.

Read about Pontiac, Mich.'s experience with an emergency manager.

In Michigan, when the repeal of a law is pending a vote, it's suspended in the interim. But state officials, including Attorney General Bill Schuette and Gov. Rick Snyder have said that while the law is suspended, an older emergency manager law called Public Act 72 will remain in effect. That law gives emergency managers less authority than the current one and restricts their oversight to mostly financial issues. But some PA 4 opponents say that until November, PA 72 should also be suspended.

The implications of either decision could be huge. In addition to affecting the cities and school districts under emergency management, the suspension and vote could impact the operations of Detroit, which was forced into a consent agreement with state officials that gives them vast oversight of the city.

Detroit unions say they'll use the recent Supreme Court ruling to fight pay cuts that were ordered as a result of the consent agreement, which was struck under PA 4.

Lou Schimmel, the emergency manager of Pontiac, Mich.,) says he's already implemented most of the reforms he sought that required PA 4 authority.

His remaining goals -- selling the city golf course and public works building, and demolishing a decaying city-owned performance venue -- can be accomplished within PA 72, he said.

Schimmel tells Governing that he will soon be formally re-appointed by the state treasurer to his same position under the terms of PA 72.

Andy Meisner, treasurer of Oakland County, Mich., -- of which Pontiac is seat -- supports the court's ruling. "I think it will bring some democracy to the process, albeit after the fact," Meisner tells Governing.

But even if voters overturn PA 4, it may be impossible to reverse some of the decisions made by Schimmel -- like shutting down the police department, selling off city property, and drastically shrinking the size of the city's workforce. "There's a lot of forces that would be standing in the way of getting that undone," Meisner says.

McClatchy-Tribune Information Services contributed to this report. 

Michigan Emergency Managers and Consent Agreements

Red markers shown below represent governments and agencies under emergency management. Yellow markers signify consent agreements. Click the icons for additional information. Information is current as of May.



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