Consent Agreement/ Emergency Manager! Detroit has
been here before?
Today, as Detroit struggles with
an escalating deficit of $300 million and a consent agreement, the intriguing question on the minds
of many is what would Mayor Coleman Alexander Young do if he were Mayor of
Detroit right now?
In 1981, the city of
Detroit and then Mayor Coleman Alexander Young faced a budget deficit of $133
million, an amount that today translates to roughly $331 million. According to
Tim Kiska, WWJ editor and Historian in political journalism, wrote, “We forget
that the 1980’s was a difficult time – even more difficult, on some levels,
than what we faced since 2008. Unemployment hit the double-digit mark in
February 1980, and stayed there until 1985, peaking at 16.8 percent in December
of 1982. It hasn’t been that high in the current recession.” Looking back
to the year 1981, budget deficit was worst; there was a looming possibility of
a state takeover. Unemployment was in double digit range; police department was
cut by 27% and Mayor Young cut thousands of workers from 1974 to 1980.
Facing re-election in 1981, Mayor Coleman Young was
unyielding in battling the financial crisis. Reality is, during an election
year you don’t make bold leadership decisions like increasing taxes to get rid
of a budget deficit. But, that’s exactly what Coleman Young did. So Mayor Young
worked with then Governor Milliken to put together a coalition of Democrats and
Republicans to provide the votes needed to get the legislature to approve the
tax hike. The proposed tax increase raised taxes on residents from 2 percent to
3 percent and on non-residents from .5 percent to 1.5 percent.
Mayor Young then hired Conrad Mallet Jr., former
Supreme Court Justice, former chief administrator for the Detroit Medical
Center, who is currently a member of Governor Snyder’s financial review team,
to lead the campaign advocating for Detroiters to vote in favor of a tax
increase. How ironic! But in the end voters approved the tax hike by a 68-32
margin. Conrad Mallett played a major role in saving Detroit from a state
takeover in 1981 and now he sits on the governor’s review team to establish an emergency
manager and has been mention as the possible EM. If Coleman Alexander
Young, the first African American Mayor of Detroit was still in office today,
he would have made concessions with labor, he would have convinced Detroiters
to vote in favor of a tax increase, he would have cussed and fussed until
Lansing lawmakers understood what strong leadership is truly about.
Leonard Flemming, of the Detroit News wrote on the assumptions of who Gov.
Snyder might select as Detroit’s Emergency Manager and said “Speculation about
who could be named the emergency manager has included former Wayne County
Prosecutor Mike Duggan, former state Supreme Court Chief Justice Conrad
Mallett, Benton Harbor Emergency Manager Joe Harris and former Washington,
D.C., Mayor Anthony Williams, who testified recently before the governor's
Detroit financial review team on the merits of a consent agreement for the
city.” Mallett, who is on the Detroit review team with state Treasurer Andy
Dillon, said he is not interested in the post.
Conrad Mallett was quoted in the Detroit News article
saying "If the governor were forced because of a lack of political
agreement to put in an emergency manager, the city of Detroit's future would be
in severe jeopardy," Mallett said. "The consent agreement is the only
solution. It's a very practical response to this very difficult situation. The
political leadership of Detroit needs to accept the truth, and the truth is the
consent agreement is necessary.” Convincing someone to be the “chief
bureaucrat” of Detroit as an emergency manager will be a challenge, as well as
finding someone with the "fiscal and political leadership that Detroit
requires because it's a very complicated job," Mallett said. It would be
tragic" if an agreement isn't reached. "It is precisely because there
is such a dearth of candidates available that both for political and practical
reasons, an emergency manager will not work," he added. "You cannot
have someone come in whose only suitability is their ability to manage a ledger
sheet. Conrad Mallett also commented saying “I have made the
determination that that person will fail."
(FYI)
So what exactly is an emergency manager?
Under Michigan law, an emergency
manager has the authority to lay off or cut the pay of employees, outsource services,
merge and reorganize departments, overturn ordinances, alter the budget, cancel
vendor contracts, abandon labor agreements and sell city assets. The City of
Detroit has many assets -- such as Belle Isle, the Water and Sewerage
Department, a share of the Detroit-Windsor Tunnel and the Coleman A. Young
International Airport -- along with tens of thousands of abandoned or unused
properties that could be sold or leased.
What happens to
Detroit residents if there is an emergency manager?
The main goal of an emergency
manager is to continue essential services. That means garbage would still be
picked up, water would run and police and firefighters would still protect
residents. But so called non-essential services, like recreation centers,
special programs and subsidies to cultural institutions like the Detroit
Institute of Arts and the Charles H. Wright Museum of African American History,
could be reduced or eliminated altogether. It also means the Emergency manager
has the power to privatize any and all services at his or her discretion. For
instance, the city of Pontiac is currently under an Emergency Manager and has
been for the past 3 years. In November of 2011, just days prior to an election
Emergency Manager Lou Shimmel privatized the department of elections in Pontiac
and fired the city clerk. Needless to say that election process was a
disaster.
What happens to
city employees?
Nonunion employees would be in
danger of losing their jobs, or having pay or benefits reduced or cut at the
will of the emergency manager. In all cities run by an emergency manager, union
employees have had to renegotiate contracts and their pay and benefits have
been cut.
On our next blog entry we will look closely at the newly signed consent
agreement!
Legal Aid and Defender's Association
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