Essay: Flint, emergency managers, local governments

A forum at the Flint Public Library showed that the recent emergency manager takeover of the city of Flint can generate much conflict and anger.

This current takeover is a result of the recently passed Public Act 4, which gives emergency managers near dictatorial power over local governments. In particular, under the current law, emergency managers have the power to modify or cancel contracts with public employee unions.

Earlier versions of this law allowed the state to intervene in local governments, but generally did not give the manager the power to cancel contracts.

In the past, one could make the case that the state should intervene in those local governments that were clearly incompetent or corrupt and unable to pay their bills. There were a few local governments that were taken over in the late 1980s or early 1990s for that reason.

But today, there are over 100 local governments that might face a "financial crisis" in the near future. Those governments face a takeover by a harsher, and more all encompassing, emergency manager law under PA 4. To be sure, many of these governments face serious financial problems.

Why the difference?

In the past the financial problems of local governments may have been the result of incompetence or corruption, but today the problems are far more widespread and endemic. Today, those governments that face takeover share at least three things in common.

First, they have lost population — often a great deal of population. (Flint has lost about 100,000 people, half its population, in the last 40 years.) And with that population loss there has been a huge loss of both the property tax base and the income tax base.

Second, as the auto industry has declined, plants have closed. Each closed factory means an additional loss of tax base for local communities. Each lost job also means a loss of income tax base for those same communities.

(Genesee County once had more than 80,000 GM jobs. Today we have a little more than 6,000).

Third, the property tax, which is the major source of revenue for most local communities, had historically been a very reliable source of revenue. Property values either remained stable or increased over the years. However, in the last three years, the nationwide collapse of property values has also reduced the property tax revenue to local governments.

By some calculations, property values, statewide, have declined almost 30 percent in the last five years.

So, local governments have faced the perfect storm of bad news — loss of population, loss of property tax base and decline in the remaining property values. The current problems of local governments are not primarily due to incompetence or corruption (though it exists). It is due to the basic structure of our society and economy.

So what can be done about it?

One of the advantages of local governments is that they are "creatures of the state." That makes them highly dependent on the state for their powers. All local governments are created by the state and they can be undone by the state. That's why the state can step in with various emergency manager laws.

However, that also means that local governments can be more flexible. Unlike the states, boundaries can be changed. Tax policies can be changed.

Most governmental boundaries in Genesee County, and in nearly all of Michigan, have been in place and relatively unchanged for 50, 75 even 150 years. At one time these boundaries may have been very logical and made sense. But Genesee County (and all of Michigan) is a very different place than it was in 1950, 1920 or 1880. People have moved from cities to suburbs, some areas have grown richer, others poorer. Many have changed racially. We've gone from a lumber-based economy, to a farming society, to a manufacturing economy and beyond. But the governmental boundaries are pretty much the same.

Should those governmental boundaries be changed to reflect this?

Maybe.

The same could be said of tax policy. Those tax policies that worked so well when we most of us lived in cities, worked in factories or worked on farms in the rural parts of the state may not work as they did before. They can be changed.

Saying we need change is easy. Doing it is something else. And the devil is always in the details. No change is painless and there would be plenty of pain to go around if we were to rework our local boundaries or revise our tax system. Lots of people have a stake in the status quo.

Some people would end up paying more in taxes than they do today.

Some might pay less.

Some might receive more government services.

Some might receive fewer services.

Local loyalties might be erased or modified.

So would local control.

Everyone would have to give up something.

But maybe, just maybe, we might all gain something.

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Paul Rozycki is a professor of political science at Mott Community College. He has lived in Flint since 1969 and has been involved with and observed Flint politics for many years. He is author of Politics and Government in Michigan (with Jim Hanley) and A Clearer Image: The History of Mott Community College.