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Changes to Emergency Manager Law

House and Senate committees have been considering repealing and replacing the existing law on Financial Emergency Managers. Republicans have called for this legislation to be moved quickly because of pending financial emergencies to local governments. Despite the necessity for Financial Emergency Managers, I have some serious concerns about the legislation. I'm continuing to talk with committee members and legislative leadership to get some changes inserted in the bills.

Here is brief overview of the bills:

• The process begins with a state review of a local government's finances. The bills add a number of ways in which the state can begin the review and Financial Emergency Manager process. The local government must cooperate with state officials.
• The state will create a review team to focus on the finances of the local government, if a probable financial stress is determined in the preliminary review. The review team will create a financial consent agreement for the local unit of government. The bill allows the state to empower local leaders with some authorities of Emergency Managers.
• The Review team will report to the Governor within 60 days of their appointment. They may recommend whether the local unit is working to fix the financial situation and abiding by their consent agreement. The Governor may declare a financial emergency, and an emergency manager will appointed to run the local unit of government.
• The proposed legislation does a number of things to expand the powers of an Emergency Manager appointed to run a local government. These things include: Assuming all powers of the elected board and city manager or mayor, control all aspects of a community's finances; terminate and impose union contracts; borrow on behalf of the local community; and dissolve the local unit of government.

These bills empower Emergency Managers to control all aspects of a local government, and supersede any local government provision. A few pieces modified of the bill include: removing the ban that prohibited officials from the local government from running for election again, and allowing Emergency Managers to take over pension funds. I fought for language that prohibits an Emergency Manager from taking over a pension fund, if the fund is over 80 percent funded. The bill is still early in the process. But, at this point, this added language would exempt the Pontiac retiree pension fund from takeover.


I have posted a detailed analysis of the bills in the document section of my website.  The analysis covers the bills as they were introduced.