When the city of Pontiac, Michigan, shut down its fire department last Christmas Eve, city councilman Kermit Williams learned about it in the morning paper. "Nobody reports to me anymore," Williams says. "It just gets reported in the press." This was just the latest in a series of radical changes in the city, where elected officials such as Williams have been replaced by a single person with unprecedented control over the city's operation and budget.
Gov. Rick Snyder put Louis Schimmel in charge of Pontiac last September, invoking Public Act 4, a recent law that lets the governor name appointees to take over financially troubled cities and enact drastic austerity measures. Under the law, passed last March, these emergency managers can nullify labor contracts, privatize public services, sell off city property, and even dismiss elected officials.
Schimmel got to work quickly, firing the city clerk, city attorney, and director of public works and outsourcing several city departments. City fire fighters were told that they would be fired if their department was not absorbed by Waterford Township's. Schimmel has proposed putting nearly every city property up for sale, including city hall, the police station, fire stations, water-pumping stations, the library, the golf course, and two cemeteries.
Williams and his six colleagues on city council have been stripped of their salary and official powers. "Nearly the whole city has been privatized," he laments.
Michigan's emergency-manager law is the centerpiece of the fiscal program enacted by state Republicans after they took over the Legislature and governor's mansion in early 2011. The law's supporters say it allows for a more efficient and nimble response to the budget crisis confronting local governments in the wake of the housing crash and near collapse of the auto industry. Critics are seeking to block and repeal what they call an illegal power grab meant to usurp local governments and break up public-sector unions.
"We haven't seen anything this severe anywhere else in the country," says Charles Monaco, a spokesman for the Progressive States Network, a New York-based advocacy group. "There's been nothing in other states where a budget measure overturns the democratic vote." Williams says emergency managers are able to enact draconian policies that would cost most city officials their jobs: "They couldn't get elected if they tried."
Benton Harbor, Ecorse, and Flint are also currently under emergency management. In Flint, the emergency manager has promised to restructure collective bargaining agreements with the city's police and firefighters unions. Benton Harbor's emergency manager banned elected officials from appearing at city meetings without his consent. Detroit, which is facing a more than $150 million budget shortfall, could be next: Mayor Dave Bing has proposed laying off 1,000 city workers and wrung concessions from public-sector unions in hopes of preventing Gov. Snyder from appointing an emergency manager.
Schimmel has pursued the most aggressive turnaround plan in the state. He says he's simply doing what elected officials have been unable to do: execute a plan for balancing the city's books quickly and efficiently. He's not there yet: The city of 60,000 is projecting a $9 million deficit for 2012. "One thing we can't do is print money," Schimmel says. "We're always chasing the dropping knife, fixing something here and losing revenue somewhere else."
With an indefinite term and a city salary of $150,000, Schimmel doesn't answer to anyone but the governor, at whose pleasure he serves. The city council can no longer make decisions but still calls meetings, which are routinely packed with angry residents. Asked by radio station WJR if the emergency-manager law hands power over to a "dictator," Schimmel sighed, "I guess I'm the tyrant in Pontiac, then, if that's the way it is."
Emergency managers aren't new in Michigan, which has been in dire financial straits for decades. Public Act 4 (officially titled the Local Government and School District Fiscal Accountability Act) beefed up a 1990 law that brought in state-appointed managers to several cities in the 2000s, without much success at stemming the flow of population, jobs, and tax revenue. Pontiac has been under some form of state-appointed management since 2009. Schimmel's predecessor laid off dozens of police officers, hired the county sheriff to patrol the city, and dismissed Mayor Leon Jukowski (whom Schimmel has rehired as a consultant paid at half his previous $104,000 salary). During that time, Pontiac's credit rating had dropped from B to triple-C. "They aren't creating revenue," Williams says of the managers. "You can't just cut your way out of a deficit."
Pontiac is not Schimmel's first clean-up job. In 2000, he was named the emergency manager of Hamtramck, where he served for six years. In 1986, a judge appointed him to oversee Ecorse's finances after the city landed in state receivership; he stepped in and privatized city services. Today, the city is back in debt, and back under state management. Schimmel concedes that the privatization strategy can backfire, but he blames inept local government. "If you don't have an overseer of the contractor, privatization can be much more expensive than in-house services," he explains.
Schimmel is also a former adjunct scholar and director of municipal finance at the Mackinac Center for Public Policy, a free-market think tank that shares his enthusiasm for privatizing public services. The center has received funding from the foundations of conservative billionaire Charles Koch, the Walton family, and Dick DeVos, the former CEO of Amway who ran as a Michigan Republican gubernatorial candidate in 2006.
In 2005, Mackinac published an essay by Schimmel that called on Michigan's Legislature to give emergency managers the power to impose contract changes on public-employee unions and "replace and take on the powers of the governing body." When Republicans gained control over Lansing in 2010, Mackinac reprinted Schimmel's article. Last March, the center celebrated when the Legislature implemented its prescriptions in Public Act 4.
The Mackinac Center claims that Michigan could save $5.7 billion annually if public employees' benefits were comparable to those of private-sector workers. Public-employee unions say cuts to public-sector jobs have only worsened the state's economic woes with foreclosures and intensified reliance on state aid programs in cities like Flint, where the jobless rate was 17.5 percent at the end of 2011. "It's an acceleration of the downward spiral," says Brit Satchwell, president of the Ann Arbor Education Association, a teachers' union. "Our goal is [to] outlaw government collective bargaining in Michigan," wrote Mackinac's legislative analyst in an email to a Republican state representative last summer. (The message was obtained by the liberal think tank Progress Michigan.)
The Mackinac Center is a member of the American Legislative Exchange Council, a clearinghouse for pro-business state legislation. (Its model bills have been linked to Arizona's anti-immigration law and Wisconsin and Ohio's collective bargaining bans.) James Hohman, the center's assistant director of fiscal policy, was one of 40 private-sector representatives at an ALEC conference in December 2010 where, according to minutes from the closed-door meeting, participants hammered out model legislation that would align public- and private-sector pay and restructure state pensions. (Jonathan Williams, ALEC's tax and fiscal policy director, did not respond to requests for comment.)
Foundations affiliated with the Koch brothers have funded ALEC's reports on state fiscal policy. The State Budget Reform Toolkit and Rich States, Poor States both echo elements of Michigan's emergency-manager law, encouraging state legislators to target public employees and identify privatization opportunities. The most recent Toolkit report recommends that states create a "centralized, independent, decision-making body to manage privatization and government efficiency initiatives." Michigan's law grants far more sweeping powers to one appointee.
Nearly one year after the passage of the emergency-manager law, its opponents are rallying to blunt its impact. The American Federation of State, County and Municipal Employees and the Detroit-based nonprofit Michigan Forward announced they've collected more than the required 160,000 signatures necessary to put the law up for referendum in November; they plan to deliver the signatures to the state on February 29.
Democratic Rep. John Conyers has called on the Department of Justice to review the law in light of the Voting Rights Act and the contract clause of the Constitution. As the state treasurer's office began a review of Detroit's finances to determine whether the city is eligible for an emergency manager, Democratic Sens. Carl Levin and Debbie Stabenow asked Gov. Snyder not to name any more emergency managers.
The Detroit-based Sugar Law Center for Economic and Social Justice has filed a lawsuit to block the law, claiming it violates the state constitution, including the home rule provision that defines residents' rights to elect a local government. Tova Perlmutter, the law center's director, says the suit isn't just about Michigan: "If we win this case, it will give other state legislatures pause before pursuing similar laws."
The Center for Public Integrity is a non-profit, non-partisan investigative news outlet.
Link to article from Mother Jones
Paul Abowd is a reporter at the Center for Public Integrity and an editor of the Detroit-based Critical Moment. The Center for Public Integrity is a non-profit, non-partisan investigative news outlet. He is finishing production on a documentary about the city's Brewster-Douglass housing projects. He tweets as @PaulAbowd.
After initially stating he would rule on an emergency appeal to stop water shutoffs at the end of Tuesday’s court session, US federal bankruptcy judge Steven Rhodes announced Wednesday he would issue no decision until at least September 17. This means the city, which has shut off water service to nearly 1,000 households since resuming this brutal policy last week, will continue for at least the next two weeks.
Rhodes appointed a mediator from the US bankruptcy court, US chief judge Phillip Shefferly, to hold “confidential” mediations between the Detroit Water...
Lawrence Porter | World Socialist Web Site 04 Sep 2014 Hits:224 Michigan
While they carry signs “Thirsty For Justice” nearly 45% of Detroit’s 173,000 water accounts are considered past due, with 420 customers due to be denied service Tuesday.
The bankrupt Detroit lifted the month-long suspension of shutting off water to people who have not paid bills. Some 25,000 customers have reached payment plans with the city.
The new system seems to be working very well,” said John Roach, spokesman for Mayor Mike Duggan. The biggest changed to the payment plan program was to require only 10% of past-due balances to enter a payment...
Kaye Wonderhouse | The Global Dispatch 28 Aug 2014 Hits:195 Michigan
DETROIT, Mich. (WJLA/AP) -- Detroit's massive municipal water department, which has been widely criticized for widespread service shutoffs to thousands of customers, drew nationwide attention Thursday on Capitol Hill.
Due to public pressure, the department has temporarily suspended shutoffs for customers who were 60 days or more behind on bills for 15 days.
But with the prospect of shutoffs resuming in a week, some members of Congress are now asking the Obama administration and the Department of Health and Human Services to intervene in what they contend is a humanitarian crisis facing...
Scott Thurman | AP | ABC 7 News 01 Aug 2014 Hits:359 Michigan
Maude Barlow, Canadian author and national chairperson of the Council of Canadians, with a delegation of water rights advocates brought 260 gallons of water to Detroiters July 24.
Of the 15,000 homes that have had water shut off by Emergency Manager Kevyn Orr, it is estimated that only 48 percent are back in service.
“We came to pay tribute to the people of Detroit,” Barlow said in remarks made at St. Peter’s Church, Michigan and Trumbull, where the water was delivered.
“Fresh water and sanitation are human rights guaranteed by the United Nations,”...
The Michigan Citizen 30 Jul 2014 Hits:332 Michigan
The Detroit Water and Sewerage Department is suspending its water shutoffs for 15 days starting today to give residents another chance to prove they are unable to pay their bills.
“In case we have missed someone who has legitimate affordability problems this will allow them to come to us to see if they can work out payments,” department spokesman Bill Johnson said. “We’ve always maintained that what we were doing was a collection effort — not a shutoff effort.”
The decision comes after the city has put into national spotlight for a...
Brent Snavely, Matt Helms | Detroit Free Press 21 Jul 2014 Hits:269 Michigan
Oh, make you wanna holler
The way they do my life
This ain't livin', this ain't livin'
No, no baby, this ain't livin'
No, no, no, no
--Marvin Gaye, "Inner City Blues"
On July 18 thousands of activists and dozens of organizations will converge on downtown Detroit to protest the privatization of the city’s assets and the disconnection of water to tens of thousands of low-income residents. The UN has called the shutoff a human rights violation. Demonstrators from around the country will rally in Hart Plaza at 1 pm, linking arms with the citizens of...
Ben Ptashnik and Victoria Collier | The Progressive 09 Jul 2014 Hits:383 Michigan
Detroit made international news this month when its municipal water board resumed cutting off water to residents with unpaid bills. With thousands of community members struggling in homes with no running water, local groups reached out (PDF) to the United Nations special rapporteur on the human right to safe drinking water and sanitation to intervene. On Wednesday, U.N. officials responded, calling the water department’s actions a “violation of the human right to water and other international human rights.”
The Detroit Water and Sewerage Department’s decision to cut off residents with unpaid...
Anna Lappé | Al Jazeera English 02 Jul 2014 Hits:786 Michigan
Rep. John Conyers (D-Mich.) won't appear on the Democratic primary ballot after failing to submit enough valid signatures, Wayne County Clerk Cathy Garrett said on Tuesday.
"It is my determination that in accordance with the current laws and statutes of the State of Michigan, the nominating petitions filed by Congressman John Conyers, Jr. are insufficient to allow his name to appear on the August 5, 2014 Primary Ballot," Garrett said in a statement.
The decision means Conyers may have to run as a write-in candidate if he wants to keep a seat he's held...
Cameron Joseph | The Hill 14 May 2014 Hits:674 Michigan
Rep. John D. Dingell (D-Mich.) will retire at the end of his current term, capping a historic career as the longest-serving member of Congress in history.
In prepared remarks for his annual "State of the District" speech distributed by his office Monday afternoon, Dingell described his decision as personal and rooted in the standards he had set for himself as a lawmaker.
"Around this time every two years, my wife Deborah and I confer on the question of whether I will seek reelection. My standards are high for this job. I put...
Sean Sullivan | Washington Post 24 Feb 2014 Hits:517 Michigan
On December 3, United States Bankruptcy Judge Stephen A. Rhodes—to the surprise of no one—formally ruled that Detroit is “eligible” for bankruptcy. In other words, creditors will now wrangle over Detroit’s government assets with Rhodes as the referee.
It is important to understand that at no point has Detroit declared or requested bankruptcy. Indeed Detroiters and others in Michigan have resisted as best they could, only to be overpowered at every turn. As Judge Rhodes explains below, bankruptcy has been orchestrated from Lansing (the state capitol) with a lot of help...
Frank Joyce | AlterNet 17 Dec 2013 Hits:522 Michigan
Michigan lawmakers passed a controversial measure on Wednesday that will ban all insurance plans in the state from covering abortion unless the woman's life is in danger. The law, which takes effect in March, will force women and employers to purchase a separate abortion rider if they would like the procedure covered, even in cases of rape and incest.
Supporters of the "Abortion Insurance Opt-Out Act" argue that it allows people who are opposed to abortion to avoid paying into a plan that covers it. Opponents have nicknamed it the "rape...
Laura Bassett | Huffington Post 11 Dec 2013 Hits:1678 Michigan
U.S. Bankruptcy Judge Steven Rhodes ruled Tuesday that the city of Detroit is eligible for bankruptcy after a long court battle between city appointed 'emergency manager' Kevyn Orr and union and labor activists who say the decision paves the way for workers' pensions to be cut.
Rhodes ruled that Detroit is insolvent, a legal criteria for bankruptcy, meaning it can cut public pensions for the bankruptcy filing.
Critics say the city bankruptcy filing, the first of its kind, is an attack on pensions and future livelihoods for workers in the city of...
Common Dreams Staff 03 Dec 2013 Hits:421 Michigan
Contradicting what the corporate media editorial boards have promoted in chorus with the multi-millionaire Governor Rick Snyder and his appointed emergency manager Kevyn Orr, 110 people filed objections to the forced bankruptcy of the City of Detroit. The hearing took place on September 19 and was widely covered in the local, national and international press.
This extraordinary hearing had provided only a small window of time for legal action. Many of the people that testified were retirees, city workers, community organizers and professionals who met the deadline set by the Judge...
Abayomi Azikiwe | Global Research 24 Sep 2013 Hits:793 Michigan
Much has been justifiably made about the damage the Roberts Supreme Court has done to voting rights in their recent decision, Shelby County v. Holder. However, a potentially more insidious plot denying the precious right to vote is occurring in my own state of Michigan, where Republican Governor Rick Snyder has appointed an emergency manager to run Detroit in place of the duly elected mayor and City Council. Even more troubling, the governor did so after Michigan voters had rejected the emergency manager law at the ballot box, when late...
Rep. John Conyers, Jr | Huffington Post 16 Sep 2013 Hits:745 Michigan
Detroit filed the largest municipal bankruptcy in the nation’s history Thursday afternoon, capping a long decline that left the nation’s automaking capital bleeding residents and revenue, while rendering city services a mess.
The nation’s fourth-largest city in the 1950s with nearly 2 million residents, the city has seen its populaton plummet to 700,000 as residents fled increasing crime and deteriorating sevices, taking their tax dollars with them.
The five-decade slide has left the city owing creditors some $19 billion and under the control of a state-appointed emergency manager. The manager has been...
Michael A. Fletcher | The Washington Post 18 Jul 2013 Hits:433 Michigan
In November, Michiganders voted the state's undemocratic Emergency Financial Manager law out of existence. But that didn't keep Snyder and legislators from claiming control of Motor City.
As of today, Detroit…
On Thursday an emergency manager was named for Detroit, Kevyn Orr, a partner in the Jones Day law firm.
MICHAEL STAMPFLER, [email] Available for a limited number of interviews with major…
Teachers in Grand Rapids, Michigan, say that new paycheck cuts are leaving them with so little pay they qualify for food stamps. The teachers, working without a contract, have been…
Michigan Governor Rick Snyder declared the city of Detroit in a state of "fiscal emergency" on Friday afternoon and announced he would appoint a emergency financial manager (EFM)…
On the heels of a lawsuit filed recently in the Ingham County District Court challenging the constitutionality of Michigan’s new Right to Work law, a coalition of unions has filed a…
Michigan’s so-called lame duck legislature passed a remarkable 232 bills in its last week of business. Only one bill, SB 0116 (2011), the so-called Right to Work Bill, passed on…
LANSING, Mich. — The Michigan Legislature approved sweeping legislation on Tuesday that vastly reduces the power of organized labor in a state that has been a symbol of…
Newly elected Rep. Dave Curson moved into his spacious, sun-drenched Capitol Hill office three weeks ago, eager to savor every minute of his congressional career.
And relish it he…
Lansing, MI – Many concerned worker gathered in Lansing today as Republican legislators scrambled to move forward two bills that had been dormant in their committees for most of the…
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