Michigan to appoint emergency manager for Detroit

The city of Detroit will soon lose self-governance as Michigan Governor Rick Snyder says an emergency manager will take control:

“I believe it’s important to declare the city of Detroit in financial emergency,” Snyder announced at a midday press conference on Friday, in front of the banner, “Detroit Can’t Wait.” The EM will assume the suspended powers of the mayor and city council, and will take unilateral control of municipal finances, union contracts, pension systems, and more.

The consolidation of power will likely lead to cuts and asset sales that the mayor and city council had sought to avoid, which could include the privatization of most of the city’s water supply or the sale of Belle Isle Park. The EM also has the power to declare the city bankrupt, though that option seems unlikely.

The process has racial and political overtones. Detroit is over 80 percent black and its city government is controlled by Democrats; the Michigan statehouse is largely white and firmly in Republican control. If an EM is appointed in nearby Inkster (pop. 25,000, currently under a “consent agreement” with the state), as Chris Savage has pointed out, more than half of Michigan’s 1.4 million African Americans will be governed by unelected officials.

Snyder’s decision follows last week’s devastating report from a state review team that Detroit is unable to address its long-term financial problems. The Motor City, the investigation found, has $14.9 billion in long-term debt and pension obligations, and its general fund has not shown a surplus since 2004. The review team unanimously recommended state intervention…

Five other cities in Michigan are also under state control. Detroit will be the largest city in the country to lose the ability to govern itself.

It will be interesting to see what goals the emergency manager has. To fix the budget and turn a surplus? To contract the city to a viable size? To try to attract growth? To stem the population loss? To privatize unprofitable utilities? Related to the goals, I’m also curious to know how the state will determine whether the emergency manager is “successful.” What happens if the emergency manager doesn’t work out?

In the long run, the ability to self-govern seems to be a bedrock principle in American life. I wonder how much Governor Snyder really wants to do this versus feeling like it has to be done to turn Detroit around. The political fall-out from such a move may not be pretty and states don’t want to be in long-term positions like these.