New Mich. Law for City Deficits: Overreach or Good Idea?

By:  Raven Clabough
06/30/2011
       
 New Mich. Law for City Deficits: Overreach or Good Idea?

President Obama’s former Chief of Staff Rahm Emanuel once said, “Never let a good crisis go to waste.” Some wonder if that is what is taking place in Michigan. A new state law, Public Act 4, signed earlier this year, grants much wider powers to emergency financial managers (EFMs) who are assigned to fiscally troubled cities and school districts. Though the measure has drawn the criticism of political analysts as well as interest groups, proponents say it will prove to be beneficial to struggling cities, as drastic times call for drastic measures. While the law provides EFMs increased authority, the EFM program was not established under the new law. The Blaze explains:

The authority for the EFM program was established by Michigan’s Public Act 72 that was signed into law by Democratic Gov. Jim Blanchard in 1990. If the state determined that a serious financial problem existed in a municipality or school district, Public Act 72 granted the governor’s office authority to intervene in local government administration as a last resort means of shoring up budget deficits. But as the state’s budget problems only continued to grow, it became clear that while well-intentioned, the EFM would not have the necessary tools to be successful.
 

President Obama’s former Chief of Staff Rahm Emanuel once said, “Never let a good crisis go to waste.” Some wonder if that is what is taking place in Michigan. A new state law, Public Act 4, signed earlier this year, grants much wider powers to emergency financial managers (EFMs) who are assigned to fiscally troubled cities and school districts. Though the measure has drawn the criticism of political analysts as well as interest groups, proponents say it will prove to be beneficial to struggling cities, as drastic times call for drastic measures. While the law provides EFMs increased authority, the EFM program was not established under the new law. The Blaze explains:

The authority for the EFM program was established by Michigan’s Public Act 72 that was signed into law by Democratic Gov. Jim Blanchard in 1990. If the state determined that a serious financial problem existed in a municipality or school district, Public Act 72 granted the governor’s office authority to intervene in local government administration as a last resort means of shoring up budget deficits. But as the state’s budget problems only continued to grow, it became clear that while well-intentioned, the EFM would not have the necessary tools to be successful.

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Michigan Governor Rick Snyder (pictured)

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