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Jack Lessenberry

Jack Lessenberry

Missing Headline: “Detroit Jumps Off Fiscal Cliff”

December 14, 2012

DETROIT — If you want a measure of how crazy things are in Michigan these days, consider this: On Monday, the state signaled its intention to take control of Detroit, probably next month. Yet thanks to the, “Right to Work” wars, that dramatic development involving Michigan’s largest city received barely any attention. Except from state officials, that is. “We are coming to the end of the road,” State Treasurer Andy Dillon said, as he announced the required review of Detroit’s finances that almost certainly leads to the appointment of an “Emergency Financial Manager.”

Though protesting feebly while insisting that he might be able to balance the budget once he lays off another 500 city workers, Mayor Dave Bing seemed to know the jig was about up, saying, “The state‘s got to do what they’ve got to do.” Nothing like this has ever happened before. No city Detroit’s size has had an Emergency Manager, or gone through bankruptcy. Yet thanks to the battle over Right to Work, the story barely snuck on to the bottom of the front page of Detroit’s own newspapers.

True, nobody would deny that the Right to Work “coup” Republicans pulled off December 5th during the lame duck session of the legislature was stunning. Michigan woke up that day unsure whether Governor Rick Snyder would even sign a Right to Work bill. Since taking office, he had repeatedly said outlawing the union shop, “isn’t on my agenda.” The self-styled “tough nerd” said he wanted to avoid creating the nasty and bitter atmosphere that developed in Ohio and Wisconsin after Governors took on organized labor.

But then he did a complete about-face. Not only was Snyder suddenly in favor of Right to Work, last week he said the time to do it was now. Right now.

The Governor announced his reversal shortly before noon. By the time some people had finished eating dinner, Right to Work legislation had been rammed through both the state House and Senate. “As much as I detest the legislation, I detest more the way it was done,” said State Senator Steve Bieda (D-Warren.) “We’ve had more deliberate hearings on something like a commemorative license plate,” he said. Five days later, both Chambers reconciled their versions, and Rick Snyder signed them into law.

Right to Work is bound to change Michigan, though perhaps more for government workers and teachers, a majority of whom are union members. But barely one out of eight Michigan private sector workers is now represented by a union. The law won’t take effect until late March, and it will be much longer before its full effects will be apparent.

But developments in Detroit are bound to happen much faster. Eight months ago, the Mayor and the Governor fashioned a formal “Consent Agreement” to keep the state from appointing an Emergency Manager. However, it seemed doomed from the start, as unions balked at making concessions and the Mayor and the City Council first fought, and then tried to stare each other down in an unnerving cold war.

Led by member Charles Pugh, a former local TV anchor with no prior government experience, the Council seemed to automatically oppose anything the Mayor or the Governor was for. When Council repeatedly refused to approve a contract with a law firm—something specifically required by the consent agreement—the state seemed to decide, “enough is enough!” Monday, the Detroit Financial Advisory Board urged the state to begin a month-long review of the city’s books, something that in smaller cities has been the last stop before an Emergency Manager.

When that was announced, Detroit City Council suddenly seemed to undergo an overnight attitude adjustment. Members suddenly approved reform measures that had been stalled for weeks. They approved, by a narrow 5-4 vote, the law firm contract as well as other measures designed to root out fraud and corruption and allow the city to furlough and lay off employees. Mayor Bing said he hoped this “will go a long way towards reestablishing the relationship between ourselves and Lansing.” But there was no indication that anything fundamental had changed, that the state review of Detroit‘s finances would be halted, or that any of this solves the city’s inability to balance its own budget.

The city’s accumulated budget deficit is projected to reach $440 million soon. That doesn’t include $12 billion in unfunded pension and other liabilities. Some Council members do seem to understand the city’s situation. Gary Brown, Council President Pro Tem, sent a remarkable e-mail letter to his constituents. He never liked the idea of an emergency manager, and doesn’t want one now. However, he knows that there may be no choice. Brown said: “It is likely the only option to avoid bankruptcy as the city‘s expenses continue to outpace revenue.” Detroit seems likely to run out of money to meet payroll within weeks.

The Councilman, a former longtime police officer, told his constituents, “In my opinion, bankruptcy is not an option for Detroit. It would increase unemployment, and have widespread impact on public and private institutions in metro Detroit.” That would include a near-certain downgrading of the bond ratings of surrounding communities, counties and the state of Michigan itself. What’s more, a Detroit bankruptcy filing could be tied up in federal court for months, costing the impoverished city millions of dollars. Still, it isn’t clear whether any Emergency Manager could actually stop a municipal bankruptcy, or be forced
to lead the city into one instead.

The week ended with much of Michigan stunned at having suddenly been transformed into a Right to Work state. But Detroit may yet top Lansing when it comes to drama—possibly even within a few short weeks.

Veteran journalist and national Emmy Award winner Jack Lessenberry teaches at Wayne State University, serves as Michigan Radio’s senior political analyst and writes regularly for several publications. He also serves as The Toledo Blade’s writing coach and ombudsman and is host of the weekly television show Deadline Now on WGTE-TV in Toledo.

December 13, 2012 · Filed under Jack Lessenberry Tags: , , ,

11 responses so far ↓

  • 1 George Griffiths // Dec 14, 2012 at 9:46 am

    When I was Councilman and then Mayor of East Lansing, the US Congress provided funds for much of our expenses. It was called Revenue Sharing. At a National League of Cities conference in Washington, we were told that the US Govt. had the ability of graduated income tax and could raise funds to help out struggling communities.
    Now, with the Grover Norquist pledge among the current Majority, the large communities are struggling and going Brtoke while the huge income people are escaping any responsibility to do anything in return for their riches.

  • 2 Anagnorisis // Dec 14, 2012 at 12:37 pm

    Analogy: Here in East Jordan, manhole cover capitol of the world, the estuary of the Jordan River and Lake Charlevoix, through overuse has brought sand and silt into the harbor in juggernaut onslaught none can dredge fast enough to maintain boat launch and marina now near unuseable. Same with Detroit which is inundated with debt and deficit. Come to think of it, so is the US. One can avoid the writing on the wall for awhile. But natural or unnatural consequences tend to come due.

  • 3 Grace // Dec 14, 2012 at 2:26 pm

    Old joke: Andy Dillon, Rick Snyder, Bryan Calley, Randy Richardville and Jase Bolger all fell over the fiscal cliff. Who was saved:

    Michigan!

  • 4 harvey bronstein // Dec 14, 2012 at 4:32 pm

    THE so-called RTW leguislation will take Rick Snyder from a prohibitive favorite in 2014 to at best even, depending, of course on his opponent. No Virg this time.

  • 5 Greg Thrasher // Dec 16, 2012 at 12:36 pm

    Yawn… more doom and gloom about Detroit from the usual hollow suspects .

    The residents of the city are citizens of USA as such they should demand relief and assistance pursuant to our US constitution which provides for the ‘general welfare’ of the citizens of America.

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