As of May 2012, there are four cities with appointed Emergency Managers (Pontiac, Ecorse, Benton Harbor, and Flint) and three cities with active consent agreements (River Rouge, Inkster, and Detroit.) This study looks at several factors that may separate these seven cities from other cities in Michigan that are in fiscal stress. The purpose of this study is to find out how well the Emergency Manager Law has been applied to fiscally stressed cities in Michigan and what common factors are shared by the cities that have gone through the process. The study is intended to fact check some of the arguments on both sides of the debate and yield some truth about how the Laws affect certain cities over others.
As cities around the country show more signs of fiscal distress from years of economic downturn, and municipal bankruptcies become more common, Michiganders are paying much greater attention to our state’s policies for dealing with municipal fiscal stress. The extreme case of a local financial emergency in which an Emergency Manager is appointed to take over a city has been widely debated this year after the passage of Public Act 4 in March. However, it is important to recognize the history of state intervention in municipal fiscal stress in this country and in this state.
One of the best ways to get a substantive look at what programs a state - and thereby its lawmakers, its interest groups and the rest of its political players - focuses on is to look at where it spends its money. Every state has a finite budget, and how lawmakers divide this pot between the multitudes of government programs gives a good sense of its policy priorities.
An overview of the Michigan budget process, with information on where the money comes from and where it goes.
During the 1980s, Michigan's 15 public universities received about 75 percent of their funding from the state and only generated about 25 percent of their funding from tuition dollars, according to Mark Burnham, Michigan State University's vice president for governmental affairs. Today, those ratios have flipped, and this year's budget negotiations do not seem likely to halt the downward trend.
