And So the Madness Begins …

A few weeks back on the Tim Corrimal Show we discussed, among other things, the GOP-sponsored bill in Michigan under which “the governor could declare a ‘financial emergency’ in towns or school districts … [and] could then appoint a manager to fire local elected officials, break contracts, seize and sell assets, eliminate services - and even eliminate whole cities or school districts without any public input.” The show’s panel expressed, shall we say, incredulity that a state governor – a supposedly limited-government-type Republican state governor, no less – could override the will of the people, seize control over a local government entity and fire duly elected officials at his sole discretion.

Heh. And you thought we were kidding.

John V. Moore of Windy City Watch cued me into this, from the Detroit News:

Benton Harbor— In a move believed to be the first under sweeping new state legislation, Emergency Manager Joseph Harris suspended decision-making powers of city officials Friday.

Officials only can call meetings to order, adjourn them and approve minutes of meetings as part of the order issued Friday.

The action is likely the first since Gov. Rick Snyder signed into law in March a new statute that grants more powers to emergency managers appointed by the Treasury Department to take over distressed schools and communities.

…

[T]he move drew a strong rebuke from the AFL-CIO. The union represents administrative workers, among others.

“This is sad news for democracy in Michigan,’ said Mark Gaffney, president of the Michigan AFL-CIO. “With the stripping of all power of duly elected officials in Benton Harbor … we can now see the true nature of the emergency manager system.”

…

The new powers of emergency managers include setting aside collective bargaining. Harris’ order comes before two days of training for prospective emergency managers and turnaround experts is to be held next week.

Harris, former chief financial officer for the city of Detroit, wasn’t available for comment late Friday night.

Emergency managers are in place at Detroit Public Schools and in the cities of Benton Harbor, Ecorse and Pontiac.

What kind of madness is this? Allowing the governor – or, according to the Detroit News, certain unelected officials in the state’s Treasury Department – to hire an “emergency manager” (who, given the nature of state politics, could easily by someone’s brother-in-law, or some major donor to the governor’s party, or some other insider whose political connections outweigh his or her actual qualifications), who then is empowered to axe all the elected officials you voted for in your home town and to rule by fiat? Really, Michiganders – that’s the change you voted for last November?

But there’s another problem with Michigan’s “emergency managers” law. That bit about unilaterally breaching contracts with private entities like unions? Guess what. It can’t be done, on account of a little thing called the Tenth Amendment to the United States Constitution: “No State shall … pass any … Law impairing the Obligation of Contracts … .” U.S. Const. Art. I § 10. Which is why, in United States v. Bekins, 304 U.S. 27 (1938), the Supreme Court noted that the municipal bankruptcy provisions of federal bankruptcy laws (now found in Chapter 9 of the Bankruptcy Code), allowed fiscally insolvent municipalities a remedy that they would not otherwise have: “[Prior to the federal municipal bankruptcy laws,] [t]he natural and reasonable remedy through composition of the debts of the [local taxing] district was not available under state law by reason of the restriction imposed by the Federal Constitution upon the impairment of contracts by state legislation.” 304 U.S. at 54 (emphasis supplied).

Which gets to the real point. If a municipality like Benton Harbor is facing a genuine economic crisis, the way to get out of it is through bankruptcy – a remedy already provided by federal law – not by trampling on the electoral rights of its citizens and unilaterally abrogating its contract obligations. Bankruptcy involves an orderly process of compromising and adjusting debts, supervised by a judge, with the parties’ rights (including the rights of contracting parties like unions) clearly delineated by the law – all without overriding the democratic process. But I guess that’s not thuggish enough for Michigan Republicans, who prefer to use a municipality’s financial woes as an excuse to punish voters and union members – and to violate the 10th Amendment’s prohibition on state impairment of contracts.

So what else is new.

© 2011 David P. von Ebers. All rights reserved.