When Gov. Snyder said last week that he agreed with Wayne County Executive Warren Evans that Wayne County was in a state of financial emergency, that didn’t come as any sort of surprise. Evans has been telegraphing his desire to pursue some form of extreme – albeit necessary – means to apply the brakes to the runaway train that he inherited pretty much ever since he took office. And Snyder isn’t exactly known for opposing State intervention as a means of ‘correcting’ the financial stability of troubled Michigan school boards and municipalities.
Snyder’s willingness to doggedly pursue the appointment of emergency financial management as a remedy has attracted significant amounts of both praise and scorn throughout Michigan, and the results in Detroit of his much-contested approach are varied as well. Because although more are willing to concede that perhaps emergency management worked out in Detroit’s favor overall- even though the way it was done will leave a bitter taste in the mouths of many for a long time to come – it is difficult to see how the relatively recent appointment of Detroit Public Schools Emergency Manager Number Four Darnell Early can in any way be considered a rousing endorsement for its effectiveness. Not when the DPS budget deficit has ballooned to $238 million after six years of emergency management, and at least $81 million is owed by DPS to the employee’s pension fund as recently as one month ago. If the previous three emergency managers couldn’t tame the beast, Early’s prospects as DPS savior seem rather doubtful.
So given the mixed record of success for emergency management in Detroit, it is understandable – and somewhat of a relief – that Evans is pursuing a consent agreement and not yet another emergency manager as the preferred approach to reining in Wayne County’s problems. The question remaining to be answered will be exactly what form such an agreement would take. Because although a consent agreement generally allows locally elected leaders to retain some measure of control and have a higher level of input in the solution than with an emergency manager (who can basically fire everyone and void all contracts), there will still be elements to be worked out regarding the makeup/influence of an oversight board, as in how many appointees will be from the State, how many from the County, etc. A 2012 article from Michigan Radio, analyzing the nascent stages of what eventually became Detroit’s bankruptcy and subjugation to an emergency manager, described a consent agreement (something that was considered for Detroit before being brushed aside) as follows:
“The idea is there needs to be a fairly autonomous, powerful structure working alongside the elected government, to administer some harsh medicine (read: make vital but politically unpopular moves) to produce sweeping reforms.”
Which pretty much spells it out. In a June, 2015 submitted to the Detroit Free Press, Evans laid out his reasoning for why he felt a consent agreement was the only option to preventing Wayne County from going over the cliff.
“Though Wayne County is not at imminent risk of bankruptcy, without this consent agreement, the chances of it avoiding bankruptcy significantly diminish. A consent agreement is the only form of state intervention that leaves the elected leaders of Wayne County in charge. Although we made significant progress in reducing health care costs and restructuring county government, the rest of the job cannot be achieved without the additional powers of a consent agreement between the state and the county.
When I took office on Jan. 1, the county’s financial picture wasn’t pretty. It included a $52-million annual structural deficit, $1.3 billion in unfunded health care liabilities, $900 million in unfunded pension obligations and a partially built jail that would cost hundreds of millions to complete. These staggering numbers did not occur overnight. They have built up over years. The longer we wait to deal honestly with these financial facts, the more draconian the solutions.”
Granted, this isn’t the first time that an elected official has pleaded poverty to try and either restructure some finances or prior to dealing severe body blows to a union contract. But this does appear to be one of those times when it makes sense to listen.
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