Washtenaw County Commissioner Conan Smith clarifies his stance on Emergency Financial Managers

    Yesterday, Washtenaw County Commissioner Conan Smith dropped by the site and left a few comments, as he’s known to do on occasion. Well, one of those comments, which pertained to Michigan’s Emergency Financial Manager law, drew quite a bit of criticism, and, to his credit, Smith came back this evening and responded to it. Here, for those of you who don’t generally follow the comments left on the site, is Smith’s original statement, which was left in response to a post that I’d written concerning the legality of the Emergency Financial Manager program in Michigan, followed by comments left by readers calling themselves Dragon and Busy Dying, and, then, ultimately, Conan’s response.

    CONAN:

    Mark, your point about EM’s not being charged with developing sustainable strategies for a city’s turn-around is the most critical one to me. The long-term fiscal health of a city depends not on some quick-fix tricks like divesting assets or restructuring contracts, but on a community committing to a path to prosperity that may take decades to travel. The EM is decidedly not the individual to set that course — thank our lucky stars. Rather the EM’s optimal role is to right the ship — to come in, take (sometimes dramatic) corrective action to end a fiscal emergency and put the community back in a place where the threat of bankruptcy or insolvency isn’t a constant distraction.

    In my opinion, it’s when EM’s take their charge to mean more than that that we get the dictatorial exercise of power that people so rightfully fear. The decisions about systemic change in a community belong to the residents and the elected officials, and a good EM would be smart to recognize when the voice of the citizens should speak louder than whatever distant enabling legislation led them to that community in the first place.

    DRAGON:

    Why don’t you introduce yourself Conan Smith. Husband of state Sen. Rebekah Warren, D-Ann Arbor, boss of local know it all Murph.

    “Mark, your point about EM’s not being charged with developing sustainable strategies for a city’s turn-around is the most critical one to me.”

    That’s why I have spent my time figuring out sustainable strategies for Ypsi. But I will keep these sustainable strategies secret, hoping the citizens of Ypsi are stupid enough to believe my bullshit.

    “The long-term fiscal health of a city depends not on some quick-fix tricks like divesting assets or restructuring contracts, but on a community committing to a path to prosperity that may take decades to travel.”

    So you feel our pain? That’s nice.

    “The EM is decidedly not the individual to set that course — thank our lucky stars.”

    Conan Smith started things off. In addition to being the chair of the Washtenaw County Board of Commissioners, he is the Executive Director of the Michigan Suburbs Alliance, representing suburban cities that ring the metro Detroit area. Smith has gone on the record as generally in support of Public Act 4 saying:

    We absolutely need it.

    “Rather the EM’s optimal role is to right the ship — to come in, take (sometimes dramatic) corrective action to end a fiscal emergency and put the community back in a place where the threat of bankruptcy or insolvency isn’t a constant distraction.”

    What are these corrective actions? Please help us not be constantly distracted.

    “In my opinion”

    We know your opinion.

    “At the forefront of any emergency policy should be a respect for our democracy and a recognition that overriding a vote of the people is an act of last resort. Michigan citizens are also extraordinarily responsible individuals, rarely pointing the finger at another for their problems.”

    But Mr Smith we are pointing the finger at business tax cuts of 1.6 billion while running a surplus.

    “it’s when EM’s take their charge to mean more than that that we get the dictatorial exercise of power that people so rightfully fear.”

    How can we prevent this?

    “The decisions about systemic change in a community belong to the residents and the elected officials”

    So why are you in favor of taking this right away from elected officials?

    “and a good EM would be smart to recognize when the voice of the citizens should speak louder than whatever distant enabling legislation led them to that community in the first place.”

    Are you also a stand up comedian?

    BUSY DYING:

    Conan,

    Thanks for your feedback (if this is, indeed, Conan).

    What you don’t mention–and it’s something at the bottom of local outrage about PA4–is the root cause of things like working-class public school systems “failing”: continued withdrawal of funding, thought, resources… in short: support.

    It’s like this: if you put a bandaid on a massive leg wound, so that you can save sutures and gauze for your cronies, the person with the leg wound is going to fail to thrive, to say the least. Then you want to send in a specialist to chastise the victim for his leg wound, and to rummage around in drawers searching for other kinds of bandaids to put on it.

    It’s this fact–that Republicrats are more interested in material wealth than in human welfare–that the 99% have awakened to. Emergency Managers are a mistake, no matter what race / class you are, and no matter how much “tidying up” they appear to do. If you fail to take a stand on this issue, your base is eventually going to punish you at the polls (despite the fact that the Governor might hook you up with some sweet swag).

    CONAN:

    Busy Dying, you’re absolutely right that the 30+ years of public policy that drained resources out of urban areas and essentially created the financial crisis that our cities on the edge (like Ypsi) now face is the real challenge. No EM’s going to really be able to save a city in this environment.

    I’d like to be able to point the finger exclusively at Republicans for the systemic disinvestment (and they have been more responsible than Dem’s, driving “reforms” to the revenue sharing formula, designing tax expenditure systems that push resources to exurban areas, leading the creation of infrastructure bonds that allow rural areas to have both high-quality roads and low taxes….I could go on) but the truth is that Democrats have been consistently complicit or worse. The Granholm administration, for example, with the support of a Democratically-controlled House slashed statutory revenue sharing to near meaningless amounts in order to fill holes in the state budget (a pass-the-buck strategy used by Engler before and Snyder after).

    Long diatribe… sorry. In short, state leaders haven’t taken care of cities the way they should. And they’re not likely to do an about-face and suddenly restore primacy to urban areas in the state’s investment strategies.

    So, if state funding or significant policy change is not forthcoming, what do you do in a community whose financial decisions no longer allow it to serve the basic needs of its residents? Do you let it fail? That’s one option…allow the decisions up and down the political hierarchy to run their course. But the consequences of a government’s collapse are simply too great. You have to have an emergency action policy.

    Now, my own approach to this is not that of this Legislature or those past. I do not believe that a singular hero can keep a city from insolvency. EFM, EM, whatever. I do agree that the State needs tools to ensure that a community is on the path to financial stability and that the leadership is held accountable to that outcome. Is take-over the ultimate action for consistent egregious behavior? Possibly. But we’ve yet to see a city — not Highland Park, Flint, Pontiac, Detroit, Hamtramck, Ecorse or Benton Harbor — where the local leaders were intransigent about financial reforms. Were some of them over their depth? Absolutely. But that is a time for mentorship, not dictatorship.

    About PA4 specifically….lots of people claim based on a handful of clipped quotes that I’m a proponent of the current emergency management system. I’m not. If you take the time to read the whole article (based on one short conversation with Ryan Stanton) that gave everyone the heebie-jeebies about me and the EM law, you’ll see that I’ve always thought it had huge problems.

    Michigan had an active Emergency Financial Manager law on the books (think Highland Park, Hamtramck, Benton Harbor, Ecorse and Detroit Schools) before PA4. That law had all the wrong-headed anti-democratic underpinnings that the current law does. Worse, it even failed to do the job it was designed for.

    PA4 made some serious and badly-needed improvements to that existing law. It raised the bar on overriding labor contracts. It allowed for earlier and softer State interventions. It permitted local elected officials to exercise some of the powers previously allowed only to an EFM. When I said, dragon, that we definitely needed it, that’s what I was talking about, and I meant it.

    PA4 also made some unnecessary and hideous politically-motivated changes. New managers have powers beyond addressing financial control, running to ordinances and even the existence of a community. The law goes too far — way too far — in empowering an individual in this way.

    Like many things that come from Lansing, PA4 has its good and bad sides. I think we’d be smarter as a state to only seat an Emergency Manager after a city has declared bankruptcy and craft a policy that focuses on how we provide elected officials (who are mostly lay-people) the support and resources they need to get their community back on track.

    This entry was posted in Civil Liberties, Economics, Politics, Ypsilanti and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

      6 Comments

      1. Posted February 21, 2012 at 6:34 am | Permalink

        Dragon left a response in the other thread. I thought that I’m move it to this one… Here it is.

        Wow, replying to anonymous internet cranks. Props.

        When you point to articles that use the word ‘egregious’ to defend your position and use ‘hideous’ in this response one would wonder why you support such legislation.

        Why not use your platform to attack the cuts in statutory revenue sharing?

        Why do we have 700 million in cuts to education when we are running a surplus?

        1.6 billion in tax cuts plus 400 million surplus/ 9.88 million residents = 202.49 per person x 21,000 ypsi residents= 4.3 million.

        Why can’t we get liberals to defend local spending rather than efm austerity.

        Point to a business that has moved to Michigan because of the tax cuts, and provide evidence of the jobs that they have created.

        “No EM’s going to really be able to save a city in this environment.”

        Why didn’t you say this to begin with?

        “About PA4 specifically….lots of people claim based on a handful of clipped quotes that I’m a proponent of the current emergency management system. I’m not. If you take the time to read the whole article (based on one short conversation with Ryan Stanton) that gave everyone the heebie-jeebies about me and the EM law, you’ll see that I’ve always thought it had huge problems.”

        That’s the problem. You admit it has huge problems yet you are still a proponent of it. The ‘clipped’ quote are accurate.

        ___
        I would love it if you provided even one possible solution to cities like Ypsi that haven’t had local leaders that were “intransigent about financial reforms.”

      2. Demetrius
        Posted February 21, 2012 at 7:52 am | Permalink

        “But we’ve yet to see a city — not Highland Park, Flint, Pontiac, Detroit, Hamtramck, Ecorse or Benton Harbor — where the local leaders were intransigent about financial reforms. Were some of them over their depth? Absolutely. But that is a time for mentorship, not dictatorship.”

        And that is exactly why so many of us are so angry about this law, as well as those who appear to support it. As currently written, it neither addresses the decades-long structural issues that have led many of these communities to the brink; nor does it provide any practical tools to resolve them. Instead, it imposes the blunt instrument of an unelected, unaccountable “Emergency Manager” — essentially a dictator — who is empowered to dismantle a community as much as necessary to make the budget numbers “balance.”

        In the case of Ypsilanti, in particular, this is particularly galling because — quite the opposite of “intransigent” — we’ve seen the trend-lines, and have been making significant cuts for well over a decade. At this point, the situation Ypsilanti faces is not of its own making … but rather, the result of failed (national) economic policies, and Michigan’s broken system for funding local government. No “Emergency Manager,” is going to be able to fix that — short of having a fire-sale, and dissolving the City entirely.

        Given that, I’m sure Mr. Smith can understand why any seeming attempt to rationalize this law (especially coming from a Democrat) would rub many people the wrong way.

      3. Eel
        Posted February 21, 2012 at 9:47 am | Permalink

        Can we concede that, while it can be argued that EM’s may be necessary in some poorly run cities, they have no place in a city like Ypsilanti, which has been, by most accounts, relatively well run in recent history?

      4. Posted February 21, 2012 at 10:31 am | Permalink

        EFM’s serve only one purpose, and that is to make sure bond holders get paid. If that means screwing pensioners, throwing children under the bus, so be it. The “bond holders” are the only thing (I suppose they are people since they are primarily corporations that purchase bonds) that will not be forced to make concessions and give backs. Bankruptcy is the way out. Repudiate the debt. Stop paying rent on the right to exist

      5. Walt
        Posted February 21, 2012 at 1:04 pm | Permalink

        Conan Smith will say anything.

        “We absolutely need it,” said Conan Smith, chairman of the Washtenaw County Board of Commissioners.

        http://annarbor.com/news/democrat-conan-smith-says-michigans-emergency-manager-law-will-help-local-communities/

      6. Posted February 21, 2012 at 6:48 pm | Permalink

        What about the possibility of bringing together the well-run communities presently on the precipice, like Ypsilanti, and lobbying for real, comprehensive change at the state level that would see increased revenue sharing for the aging urban communities that have essentially been kneecapped by the state and left to die? And, if the Suburbs Alliance isn’t the right organization to lead such an effort, who is? With the exception of gambling on Water Street, Ypsi’s done everything right, from what I can tell, and still we’re headed for failure. That says to me that the problem might lie elsewhere.

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