Wednesday, April 20, 2011

The Real Reason Behind the Expanded Powers of the Emergency Financial Manager Law

There has been a bunch of hype and hyper-activity surrounding what is going on in Benton Harbor, to say the least. A lot of the concerns are very legitimate, but once again we are getting distracted by the shiny objects of the day, for example, Jean Klock Park, and most have missed the real reason behind the expanded powers of what was already a very powerful law. We can argue details all day long, but in doing so we miss the big picture and motivation, and that is - wait for it - budget cuts for regular folks, tax cuts for business folks. An issue that is becoming very complicated, really boils down to being something that is just that simple. It's the Republican Way.

Contrary to what is being said, state officials are NOT intent on coming into a community and "taking the land", or any of the nefarious motives that have been put forth by generally well-intentioned people; they are intent on having local officials make cuts and extract concessions from working people, period. Republicans aren't being greedy. They are being lazy. Or, to put it a better way, their laziness ultimately serves their greed. It's a two-fer. They are trying to wash their hands of the budget cuts made at the state level, and push all the responsibility and consequences down to local officials. Avoiding blame is what they are best at. We should know that by now.

State Treasurer Andy Dillon, having had his feelings hurt by unions before, admits to the whole thing in so many words in his op-ed at the Freep.

The primary motivation for this law was the new fiscal reality facing local governments throughout Michigan and the recognition that the old ways of doing things weren't working. The new approach is not a power grab or an effort to subvert collective bargaining rights. In fact, the goal is to give local executives and their partners the tools and incentives they need to avoid financial emergencies and maintain local control.

The greatest point of contention with this process is that, if local management and their labor counterparts can't or won't make the tough decisions necessary to address financial problems -- and after a number of preliminary steps -- an emergency manager may be given the power to modify or terminate provisions within a collectively bargained contract.

Watch the words "may be given", we will come back to that in a second.

What Andy isn't pointing out here is that the state itself has a big hand in making sure that the "old way isn't working" and creating this "new fiscal reality" by slashing the funding for schools and cities. This is disaster capitalism at its finest. In this case, the aftermath of a brutal recession has collapsed property values and tax collections at the local level, and state Republicans are exploiting the problem with even more state budget cuts, all so they can turn around and give more tax cuts to business interests. "Tax cuts" as a causation gets lost in the outrage and fear over these expanded powers - and that's exactly the way the Republicans want it.

"Fear will keep the local systems in line, fear of this battle station", a wise villain once said. And that's is what is happening with the expanded powers behind the EFM law. The locals are stepping up as quick as they can, because they are afraid the Empire will visit them next. Last night, they held a training session...

More than 300 people attended the training on Michigan's tough and controversial new emergency manager law for local governments and school districts. Fewer than one-third of them were looking for jobs as emergency managers or as consultants to oversee consent agreements for less seriously distressed local units. Most were local government and school district officials interested in making sure they never need an emergency manager.

Just make those cuts yourself, and you won't ever see us. Promise.

The new law, signed by Gov. Rick Snyder in March, provides a three-step process that allows local officials to retain control during the first two steps as they try to prevent the third step from happening, said Daly, a former city manager in Three Rivers.

The steps short of Treasurer Andy Dillon appointing a financial manager have received relatively little attention compared to the emergency manager stripping elected officials of their powers to spend money and enact policies, or telling employee unions their negotiated contracts are void.

But Daly and others who spoke at or attended the conference said they expect Michigan will see far more consent agreements — being discussed as a possible solution to the city of Detroit's financial woes — than emergency managers, who play a role similar to receivers and were known under the previous law as emergency financial managers.

Under consent agreements, local units make pacts with the state to take certain actions to improve their financial situations, such as preparing a three-year plan or performing a forensic audit.

Bingo. The deed will be done at the local level. The threat of fascism may be more powerful than the actual law itself, because to push the full force of the law would see repeated fights in court, and they really don't want that. "Consent agreements", especially in Detroit, are preferable to state and local officials. And here is a very interesting tidbit:

If an emergency manager is appointed, a prudent manager would negotiate proposed changes with public sector unions whether required to or not, said several public sector union representatives who were part of a panel.

If contracts are trashed, the "mistrust, fear and anger" an emergency manager is faced with as an outsider will only grow, said David Hecker, president of the American Federation of Teachers in Michigan.

Also, emergency managers can't break contracts on their own, only with the agreement of the state treasurer, the session was told.

Oh really. Interesting how that hasn't been highlighted before, but then again the hype surrounding the expanded power of the new law wouldn't be as scary then, would it. Of course not.

The media attention surrounding this is ultimately a good thing. Every move from here on out will be scrutinized. But don't be distracted by the shiny object du jour and the media hype surrounding it (yes, even the lovely Rachel is guilty of that at times) - keep your eyes on the main issue. How do we stop this? We can't, really. Follow the lawsuit filed in Detroit, and see where that ends up. There is a good chance that what they have passed is unconstitutional - but that will be for the courts to decide.

In the meantime, the fear of law will drive your locals to make some horrific cuts to public safety and schools - focus on the outrage of THAT, not on something that you can't prove is happening. Take the very tangible results of these budget cuts - lost jobs, increased classroom size, less police and firefighters on the street, loss of health care services in your community - and carry those into 2012.

The Republicans are already trying to play CYA on the K-12 school cuts by taking more money from health care and prisons; watch and see what happens next, wait for the damage that occurs when finally vote these cuts though (because we can't stop them) and Snyder signs the bills. Pay attention to the fallout.

That will be the real issue, the results of the overall fiscal policy. Quality of life for the everyday citizens in the face of more tax cuts for the wealthy is the meme that is quickly taking hold across the land - don't lose sight of it, because in the end, that is the ultimate battle. That is what this is all about.

Isn't it?