Detroit's Economic Crisis Heightens Tensions

Abayomi Azikiwe, editor of the Pan-African News Wire, addressing the first General Assembly of the Occupy Detroit movement. The event attracted over 1,000 at the Spirit of Hope Church. (Photo: Alan Pollock), a photo by Pan-African News Wire File Photos on Flickr.

Detroit’s Economic Crisis Heightens Tensions

Politicians battle over the extent of austerity measures while ‘emergency manager law’ faces challenge

By Abayomi Azikiwe
Editor, Pan-African News Wire

Conservative Republican Governor Rick Snyder has threatened the City of Detroit with a financial review that could lead to the appointment of an “emergency manager” who would hold power to make drastic changes in the way the municipality operates. Snyder said that he was not impressed with the way in which the corporate-backed Mayor Dave Bing is handling the ongoing economic crisis that has resulted in an over $300 budget deficit.

Snyder said that he had expected a request from Bing to conduct a financial review of the city which is the first step in the appointment of an emergency manager. The emergency manager law was recently revised by the Republican-dominated state legislature which enhanced the previous law that was utilized in the 2009 takeover of the Detroit Public Schools.

The crisis has gained attention recently based on an audit report by Ernst & Young accounting firm which indicates that the city may “run out of cash” in a few months. Both the Mayor’s office and the City Council have refused to challenge the audit report or the threats by the Governor to begin the process of appointing an emergency manager.

The majority of people on the City Council have proposed lay-offs of up to 2,300 municipal workers in addition to further cutbacks in salaries and benefits. The Mayor has advanced the idea of 1,000 lay-offs and more deep cuts in employee benefits.

The disagreement between the administration and the legislative body has also drawn the attention of the Governor and state legislature. Snyder says he has not received a letter requesting a review of Michigan’s largest city’s finances.

Snyder said of the Detroit politicians that “We’re going to encourage them to get on the same page in a constructive way. I’m still waiting to see if I get a response from either the mayor or the city council first,” the Governor told legislative correspondent Tim Skubick. (Detroit Free Press, November 22)

Although the Governor said that a financial review “just would start the process of asking for a preliminary review. My goal is to avoid a financial manager. I have no desire to see that happen.”

Nonetheless, in Benton Harbor, a majority African American city in the southwest region of the state, an emergency manager was appointed earlier this year. The emergency manager, Joe Harris, has created controversy in Benton Harbor by essentially nullifying the authority of the Mayor and the City Commission in the heavily impoverished municipality.

A previous law was utilized in the takeover of the Detroit Public Schools in 2009. The appointment of two emergency managers in the Detroit Public Schools has not resolved the problems associated with the system such as massive lay-offs, school closings and overcrowded classrooms which have become an even more serious problem.

Emergency Manager Law Challenged

With the advent of the new right-wing Governor and state legislature in Lansing earlier in the year, thousands demonstrated outside the capital demanding that this law and others which attack collective bargaining for public employees be rejected. These demonstrations in Lansing coincided with other protests in Wisconsin and Ohio where workers and students fought to stave off a nationwide effort to virtually cripple public sector unions.

A coalition of community organizations, civil rights groups and public officials filed suit to overturn the emergency manager law and a petition drive was launched to place a referendum on the ballot in November 2012 designed to repeal the attacks on the people. The coalition working to repeal the draconian law, Stand Up for Democracy, announced in late November that it had collected nearly enough signatures to place the referendum on the ballot and consequently nullify the implementation of the emergency manager bill.

Brandun Jessups of Stand Up for Democracy told the Detroit Free Press that “We’re getting very close to our 250,000 signature goal.” The newspaper noted that “Once the signatures—about 162,000—are turned in and certified, a process that could take two months, the law would be suspended until a vote.” (Detroit Free Press, November 23)

It is not clear whether the suspension of the existing law would require the state to revert to the previous one. If the current law is suspended, it would mean that the emergency managers in Benton Harbor, Pontiac and Ecorse would lose their special authority, such as the capacity to abolish labor contracts.

Threats Against Detroit Represents National Trend

If the Governor and his collaborators are allowed to impose an emergency manger, Detroit would become the largest city in recent times to be forced into a situation where elected officials would not be control of its finances. In recent weeks two other cities, Birmingham, Alabama, (in Jefferson County) which already has been forced into bankruptcy and Harrisburg, Pennsylvania, where a dispute exist among politicians and the courts over whether insolvency should be declared, illustrates the profound economic crises facing cities throughout the country.

The Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shut-offs called for the public to attend its regular weekly meeting on November 28 to discuss this burning issue in Detroit. The Moratorium NOW! Coalition rejects the emergency manager law and is urging the city administration to demand the return of state revenue sharing funds from the state of Michigan which totals over $200 million.

In addition, the Moratorium NOW! Coalition is saying that there should be a halt to the payment of debt-service to the banks as well as a request made to the federal government for a bailout of the city. These measures could provide temporary relief to the city which is one of the hardest hit by the capitalist economic crisis.