INKS: 'Financial emergency' bill not a major policy change, still dangerous



The Michigan Legislature recently passed House Bill 4214, legislation that would amend Public Act 72 of 1990, which sets the guidelines for how the governor can declare that a municipality or school district as in a “financial emergency” and put a financial manager in charge to help bring them out of the emergency.

The bill received little attention until MSNBC’s Rachel Maddow blasted the bill on her TV show last Wednesday.

But Maddow didn’t exactly give a fair report. She never mentioned that such a law already exists, and that this bill just adds to it. Instead, she made it sound like this was a grand Republican scheme to let corporations take over.

Maddow claimed that the bill would allow the financial manager to “suspend or dismiss elected officials.” While the original bill had no stipulations for removing elected officials, the latest version requires “[f]ailure of a local government official to abide by this act” in order to remove that person from office.

In fact, this is almost the exact wording from the original law that sits on the books now.

But just because Maddow’s report was alarmist, people should not completely dismiss her claims.

The bill as a whole has some very good improvements, such as adding more instances where a municipality can be declared as in an emergency, authorizing the financial manager to hold elections to vote on millages that could help the city raise revenue, and strengthens the manager’s power to limit union bargaining in instances where it might be necessary.

The bill also has some very dangerous provisions.

A preliminary review of a municipality or school district can be conducted for a number of reasons, one of which is “the existence of other facts or circumstances that in the state treasurer's (or) superintendent of public instruction's sole discretion … are indicative of … financial stress.”

That review is done by the treasurer or superintendent, and then goes to a review by a team appointed by the governor. As long as the review team finds that one of the listed reasons exists, including “other facts or circumstances,” they and the governor can declare a financial emergency and the treasurer can appoint a financial manager.

The problem with this is that for municipalities, the governor’s appointees control the entire process with only one possible court appeal.

Another vast overstep in this legislation is that it gives the financial manager the power to “disincorporate or dissolve” a municipal government with the governor’s approval. With the approval of two men, the will of an entire group of people to be a city, township, village, et cetera can be erased, and this would not be appealable.

A governor could simply declare an emergency in a city with a mayor he does not like and have the city disincorporated.

Overall, the law makes good changes, but there are some dangerous provisions that give the governor and his administration far too much power with few checks and balances.



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