Flint Citizen Counters "Logic" of Emergency Manager Action

August 29, 2011

The message below was composed by Paul Jordan, one of the plaintiffs in Brown, et al. v. Snyder, et al., the constitutional challenge to Michigan Public Act 4. He sent it to reporter Kristin Longley of the Flint Journal shortly after it was announced that State Treasurer Andy Dillon had initiated an official review of the city’s finances–the first step toward appointing an Emergency Manager to take over the city under PA-4.

Dear Ms. Longley:

I’m writing to provide what I hope will be some useful information concerning some important contributors to some cities’ financial distress. If you have any questions, I’d be happy to respond to them. Feel free to use anything in this.

As you know, I am one of the plaintiffs who are suing Governor Snyder and State Treasurer Andy Dillon to overturn PA 4, the new emergency manager law. It is therefore particularly disturbing to me that Flint’s finances are undergoing a financial review at Mr. Dillon’s initiative. This is the first step towards the appointment of an emergency manager for Flint—an appointee of the governor possessing dictatorial powers.

The emergency manager law is based upon a cruel and false assumption: That the revenues of local governments have nothing to do with the financial distress that so many localities—including Flint—experience.

The reality is that cities in financial distress have residents who are much poorer, have lower property values, and have a much greater proportion of vacant properties (on which taxes are probably NOT being paid).

Oakland County (outside of Pontiac) is generally regarded as financially healthy, while Pontiac has had an emergency manager for some time. If we consider only the part of Oakland County outside Pontiac and compare it to the cities of Pontiac and Flint on these measures we discover these facts for 2009:

Oakland County (outside Pontiac)

Pontiac

Flint

Per capita income

$36,318

$16,399

$15,895

% below poverty rate

6.2%

28%

34.9%

Per capita property value

$41,588

$11,399

$10,418

% of vacant houses

7.6%

15.8%

20.9%

(This is based upon data from county reports along with information from the American Community Survey for 2009)

It is also false that cities that are in financial distress irresponsibly spend an exorbitant amount of money compared to those that are not in distress. Consider these figures (also from 2009) based on city audit reports filed with the state:

Bloomfield Hills

Pontiac

Flint

Benton Harbor

Revenue per resident

$2,644

$952

$870

$880

Expenditures per resident

$3,368

$952

$910

$992

Difference

- $724

$0

- $41

- $112

Not only do poorer cities spend less, they often do a better job than more affluent cities in matching expenditures to revenues!

Some of the cities where emergency managers have been imposed have had some distinctive and even unique assets. Emergency managers have disposed of some of these assets, allegedly in an effort to make more money available to support local services or to pay local debt. In Benton Harbor, for example, part of the publicly owned Lake Michigan shoreline was leased to a private development company so that they could build condos and a golf course on it. In Pontiac, the Silverdome (built at taxpayer expense) was sold to a private company.

The annual payment for the lease of part of Benton Harbor’s Jean Klock Park was reportedly only $20,000—an incredible bargain. The Silverdome was sold for $500,000 while the emergency manager himself had previously estimated that it was worth $7,500,000—another fantastic bargain! The primary beneficiaries of these bargains were the chosen businesses, not the citizens of those cities.

Flint, too, has at least one incredible asset remaining despite its troubles—Hurley Medical Center. We can be certain that, if an emergency manager is appointed for Flint, Hurley will be sold to some for-profit hospital corporation at a bargain price. The justification undoubtedly will be to provide the city with a few million dollars for a short period of time, while the loss to the people of Flint will be experienced forever afterwards.

The answer to improving the well-being of Michigan’s cities isn’t liquidating whatever assets they have at fire-sale prices—it is improving the revenue available for city services. Poorer cities do not have less need for police or fire fighters than richer cities—in fact they are likely to have more need.

The state has been consistently ignoring its obligation to do this. Article I Section 1 of the Michigan constitution states that, “Government is instituted for their (the people’s) equal benefit, security and protection.” This means that the state government has a responsibility to ensure an adequate level of public services, fire, and police protection to everyone in Michigan, whether they live in Bloomfield Hills or Flint. It has failed miserably in that responsibility. Instead of supporting cities, it has been cutting state funding to cities while giving $1.8 billion in tax breaks to businesses in its upcoming budget year alone!

The emergency manager law is a cruel hoax that deserves to be set aside, either through the ballot box or by the courts. We need to squarely face the real but difficult issue of how to adequately and fairly fund our cities.

Very sincerely

Paul G. Jordan

Flint

 

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