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Mark Schauer would end Michigan's Emergency Manager system

Mark Schauer, who is now challenging Mich. Gov. Rick Snyder in the upcoming gubernatorial race, would scrap Emergency Managers entirely.
Mark Schauer
Democratic candidate for Michigan Gov. Mark Schauer is seen before President Barack Obama speaks at Michigan State University in East Lansing, Mich., on Feb. 7, 2014.

DETROIT - By any objective measure, the state of Michigan has been economically transformed under the tenure of Republican Gov. Rick Snyder. City agencies and entire school districts have been outsourced or privatized; public employees have been laid off in droves; municipalities have sold off vast swaths of public land; and city employee unions have seen their contracts whittled down to nothing. All of this was accomplished in the space of three and a half years. Michigan's Emergency Manager system is what made it possible.

Under Public Act 4, which Gov. Snyder approved shortly after taking office in 2011, the state has the authority to place cash-strapped cities and school districts under the stewardship of Emergency Managers (EMs). A city's EM has the power of the mayor and the city council combined, and then some; they're even allowed to unilaterally rewrite public union contracts. Essentially, placing a city under emergency management suspends the powers of its elected officials and invests all that authority in a single, un-elected figure. The system has been described as "financial martial law," and it is the force behind Detroit's recent bankruptcy negotiations, pension cuts and water shutoffs.

Now Snyder's Democratic challenger, former congressman Mark Schauer, is promising to undo the EM system. Speaking on Saturday at the liberal conference Netroots Nation in Detroit, Mich., Schauer said that he planned on "restoring democracy" in Detroit if elected governor. In an interview with msnbc, he explained that he intended to scrap the EM law entirely.

"Look, it provides unlimited power to an un-elected official," he said. "It sets aside elected officials, collective bargaining agreements, with accountability to only one person, and that's the governor."

Instead of EMs, Schauer says he would like financially stressed cities and school districts to receive "financial transition teams" that would work collaboratively with mayors, city councils, and superintendents. These teams would not act in a purely advisory capacity -- Schauer said there would be "accountability measures" baked into the new system -- but much of the city's power would remain in the hands of elected officials, and it is not entirely clear what authority the transition teams would have to impose their will.

"It's a consensus revenue estimating approach," said Schauer. "That would be a tool that would be very helpful to local governments that don't have the capacity, the forecasting abilities, to really project the kinds of revenues that are going to be coming into that community or that school district. And then part of that process will be to help identify -- in a consensus-based way -- projected revenues, and then assign financial experts to the local communities or to the school districts to monitor their budgets and stay within those limits."

Schauer's proposal would afford elected officials even more power than they had under the Emergency Financial Manager (EFM) law which preceded the EM law. The state of Michigan established the EFM system in 1990, when Democratic Gov. James Blanchard signed Public Act 72 into law. That bill empowered the state to appoint EFMs who would manage city budgets, although mayors and city councils held onto their authority in other matters. Gov. Snyder's Public Act 4 turned EFMs into EMs and radically expanded their power. The voters repealed Public Act 4 in a 2012 referendum, after which Michigan quickly reverted back to having an EFM system. But during the winter lame duck session, Gov. Snyder quickly signed a new, slightly modified version of the EM legislation back into law.

Now Schauer has a decent chance of beating the governor in his 2014 re-election campaign, and undoing emergency management entirely. A recent poll found the Democratic challenger closing in on Snyder, trailing him by just 46% to 43%.

"This is a governor who's in trouble," said Schauer, addressing the polls. "He knows it."