Since the Michigan House passed the first version of H.R. 4214, a bill that expands and clarifies the powers of emergency financial managers (EFMs), there’s been a lot of talk in the media about what the bill actually says. You may have seen Rachel Maddow’s coverage of the bill and her doomsday-like predictions of what this bill means. Since the first time she mentioned it on her show, and after several blog posts by Michael Moore who spoke out against the bill, protesting in Lansing has increased and the issue is now at the forefront of the minds of voters.
Many people seem to believe this is a continuation of what Gov. Scott Walker did in Wisconsin. We have a Republican governor who signed a bill yesterday, March 16, that deals in part with collective bargaining rights. But Rick Snyder is not Scott Walker. What a lot of people are not talking is what the bill actually says and does and how long the bill has been around. I sat down and read the new bill, intending to write a column against it. But when I finished reading and researching, I realized that EFMs are an unfortunate necessity.
The new bill clarifies the powers of an EFM, a person who is sent to a local government or school district in extreme financial duress. Their job is to help fix the problem, whatever may be necessary to do that. The clarification of their powers in the new bill includes suspending collective bargaining rights, as well as dismissing local officials.
But the new act, the one just signed by Rick Snyder, builds upon an older version of the bill which has existed since 1990. The original bill, 1990 PA 72, said an EFM would be assigned to towns or cities in major financial stress. According to Sec. 21 of the bill, in 1-F, the EFM had the power to “Make, approve, or disapprove any appropriation, contract, expenditure, or loan.”
It would appear this disapprovement applies to collective bargaining agreements as well, because even though 1-H addresses collective bargaining agreements, it doesn’t say they’re an exception to the contracts that the EFM can “disapprove.” This would seem to mean the statement “Rick Snyder is trying to end collective bargaining rights in Michigan” is wrong, or at best a half-truth, because it could be argued that EFMs have already had the power to get rid of collective bargaining agreements since 1990.
The ambiguitity of the language of the original bill may have become an issue in an economic climate like the one we have now, which is why the clarification is necessary. This way, no one is surprised when the emergency financial manger does use this power.
The rest of the specifics detailing the EFM’s powers are mostly clarifications of the earlier bill. However, the power to dismiss local officials is something that was not outlined in the 1990 bill. This is a concern to many people, but I think the real concern here shouldn’t be that EFMs have this power. Rather, what people should be worried about is that our economy is so bad that the state government thought that EFMs needed this power.
The process for sending in an EFM is so elaborate and so thorough, summing it up in an 800 word column just isn’t possible, but I’ll try to give a run down anyway.
Once a local government or school district is determined to possibly need financial help, a determination that has very specific requirements, there is a preliminary review. After that, a report is made, a review board is sent and another report is made, and then, finally, the governor can decide to appoint an EFM.
The bottom line is that getting an EFM to come to your local government or school district is really hard to do. The requirements which define financial stress at every step of the process are so thorough in my opinion that a local government or school district would have to be directly negligent of their financial obligation to the people of that local area.
Every week in the opinion section in the North Wind, someone mentions the inevitable: the economy is not turning around. We are in dire straights on a national level and it’s even worse here in Michigan, because we’ve felt the crunch longer.
Honestly, if a local government or school district is in such a bad financial condition that it is determined that an EFM is needed, they’ve failed both the people who elected them and the taxpayers.
The future ahead looks bleak, a statement underscored by the fact that the state government thought the powers of an EFM needed clarifying. We need contingency plans in place in case things truly do get bad. I hope EFMs won’t be necessary, but I’m enough of a realist to know they probably will be. They’re an unfortunate necessity, but nevertheless one I’m glad to have if my local government fails me.
