The Corner

The Uniquely American Way to Dictatorship

Detroit’s ongoing collapse and the seeming inevitability of its being placed under the control of an emergency manager is revealing the wages of governing incompetence in America. Detroit, stuck in a financial emergency of its own making, has lost the confidence of the state government, and Michigan governor Rick Snyder has less than 30 days to decide whether to appoint an emergency manager. I’ve written on how this is a perfectly rational response to a completely failed local government, but how it also raises much darker questions about the slow erosion of democratic rule in America. We may be heading into an era in U.S. history where the decades-long failure of Democratic management in America’s inner cities leads to the suspension of governance by democratically elected officials in order to save the cities that they are destroying.  

Michigan is trailblazing here, and the machinations of emergency rule are still evolving. I’ve called the emergency managers our modern “dictators” because they resemble the old dictators of Republican Rome, who were appointed for a set period of time (one year) with unlimited powers. Yet Michigan is now about to enter the third iteration of its emergency-manager (EM) law. The first, Public Act 72, was deemed too weak to deal with issues like collective bargaining with the public-sector unions that are bankrupting the state’s cities; it was followed by Public Act 4, which was voted down last November by Michigan residents who thought it gave too much power to the EMs. Not surprisingly, the most vociferous opponents of PA 4 were unions, who feared the EM’s ability to unilaterally break and renegotiate union contracts. 

Now, Public Act 436 will come into effect on March 28, and critics are charging Governor Snyder with evading the will of the people by re-instituting some of PA 4′s broadest powers. For example, EMs still have the power to abrogate collective-bargaining contracts, but the scope of the EM’s real power is laid out in Section 9(2) (emphasis added):

An emergency manager shall act for and in the place and stead of the governing body and the office of chief administrative officer of the local government…Following appointment of an emergency manager and during the pendency of receivership, the governing body and the chief administrative officer of the local government shall not exercise any of the powers of those offices except as may be specifically authorized in writing by the emergency manager . . . 

Moreover, Section 12(1)(ee) states that the emergency manager may “exercise any power or authority of any officer, employee, department, board, commission, or other similar entity of the local government, whether elected or appointed, relating to the operation of the local government. The power of the emergency manager shall be superior to and supersede the power of any of the foregoing officers or entities” (my emphasis). EM’s can fire or transfer department heads, remove any spending authority from elected officials, and renegotiate contracts. As with PA 4, subject to the governor’s approval and a local vote, EM’s can “disincorporate or dissolve [a] municipal government.”

Yet, in a peculiarly American style of compromise, the new law grants these two new powers the EMs while it offers protections for existing laws and institutions. First, any locality deemed by the state in an emergency financial situation now can choose to file Chapter 9 bankruptcy, ask for mediation, accept a new consent agreement for state supervision of finances, or choose an emergency manager. More noteworthy, unlike in earlier iterations, the EMs now may be removed from office by a two-thirds vote of the local government after 18 months of service. Meanwhile, the the EM’s decisions on spending, contracts, and ordinances can’t be touched for two years. Moreover, the EMs will now be paid by the state itself, not the localities to which they are assigned; this, according to the Detroit News, prevents voters in Michigan from repealing this law through a referendum, as they did with PA 4. So voters are stuck with the new emergency-manager law, and yet local governments are given a way to fire the EM. 

None of that makes much sense, given that local governments have fought so hard to prevent coming under the control of emergency managers in the first place. This loophole seems to open the door to endemic warfare between localities and EMs, and seems likely to pressure EMs to institute clear priorities within 18 months if it looks like they may be tossed out.

None of that may apply to Detroit, however, if Governor Snyder appoints an EM before the new law takes effect on March 28. In that case, the Motor City will be run under the rules of PA 72, which gives the local government no ability to fire the EM, but grants the manager less power to abrogate collective bargaining or dissolve local governments. Whether that will be enough to fix Detroit, or will lead simply to another step up the ladder of greater central control of localities remains to be seen. Everyone else, however, will have to deal with the more powerful, yet newly-vulnerable, emergency managers of PA 436 come this March. 


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