Why Michigan’s Emergency Manager Law Is Preemption on Steroids

State-level preemption of local government authority is expanding in this era of increasing one-party state government control. Preemptive state policies have been imposed on a range of specific issues such as minimum-wage laws, ride-sharing services (e.g. Uber and Lyft), and anti-discrimination laws.

But beyond single issue preemption, states also preempt local authority more generally when they intervene in jurisdictional affairs due to local fiscal distress. Through its controversial Emergency Manager law, Michigan offers one of the nation’s more extreme case studies, going beyond issue-specific preemption and exerting near-total control over local authority. Now a new survey of Michigan’s local government leaders finds widespread agreement that this approach—while offering some benefits—simply goes too far.

A 2013 study by The Pew Charitable Trusts reports that 20 states have intervention policies allowing them to step in when a local government faces severe fiscal distress. While the approaches differ widely across these 20 states, Michigan’s Emergency Manager law (Public Act 436 of 2012) vests far-reaching powers in the emergency manager, including the ability to set aside decision-making authority of local elected officials, overturn existing union contracts, eliminate departments, and recommend a range of further steps including the sale of a jurisdiction’s assets, bankruptcy proceedings or even complete disincorporation of a local government.

The Michigan Public Policy Survey at the University of Michigan asked local government leaders for their opinions on a wide range of issues related to Michigan’s approach, and offers a number of intriguing findings. With responses from over 70 percent of the state’s local jurisdictions, the data represent the views of local leaders from all corners of the state, from jurisdictions large and small, urban, suburban, exurban and rural.

Whereas local leaders might be expected to reject Michigan’s approach of near-complete state takeover, in fact more local leaders support the law overall than oppose it (43 percent vs. 26 percent). Drilling down into the data shows that support is even higher among leaders from the state’s largest jurisdictions (61 percent), the very types of places that have been subject to state takeovers in recent years.

And looking at one specific power vested in emergency managers offers another insight. While just 32 percent of leaders from Michigan’s smallest communities support the ability of emergency managers to overturn union contracts, this increases to 63 percent among leaders from the largest jurisdictions, where unions are much more common. In addition, 57 percent of all local leaders (including 74 percent in the largest communities) believe the state’s approach helps difficult decisions to be made because the emergency manager is an outsider, who comes into a community unbeholden to local actors. Given that unfunded pension and retiree health care obligations are often key sources of fiscal stress, many local leaders in Michigan may see the powerful emergency manager approach as a way to let the state government implement changes that are simply too difficult politically to accomplish themselves.

However, Michigan’s approach has been controversial and is labeled as undemocratic by many.   The voters overturned a prior version of the law in a fall 2012 statewide referendum, only to see a remarkably similar law—with a few new local choice options at the start and end of fiscal crises—enacted weeks later. Since then, the law has been credited with helping Detroit get through bankruptcy with remarkable speed, but also with being a key factor in the Flint water crisis.  In the latter case, an emergency manager made the fateful decision to switch the city from safe water provided by Detroit, to corrosive Flint River water. Subsequent failures by the state and federal governments also played roles. And it’s true that Flint’s city government played a role too, but that government was under control of the emergency manager accountable to the governor, not to the local voters.

In the wake of the Flint water crisis, three major panels—a governor-appointed task force, a bipartisan special joint commission of the legislature, and the state’s Civil Rights Commission—have called for significant reforms to the emergency manager law. And while the MPPS survey finds sources of support for the law among local government leaders themselves, it finds even more support for reforms. Over three-quarters of Michigan’s local leaders (76 percent) believe that emergency managers should be required to consider the input of local elected officials before making decisions, and 71 percent believe the same should be true regarding citizen input. Meanwhile, 57 percent believe Michigan should establish a state-level ombuds office to oversee emergency managers and hear appeals from local officials and citizens who disagree with decisions by their emergency managers.

As our federal system evolves, it appears likely that many states will continue to put their thumbs on local governments, preempting local authority on a wide range of individual policy issues.  When it comes to the more intrusive case of state intervention due to local fiscal crises, Michigan’s authoritarian approach offers lessons to other states that may be tempted to exert more control themselves: be careful what you wish for, with authority comes accountability.