Michigan Municipal Takeover: A Rational, Apolitical Response to Financial Distress, or Something Else?


Source: Michigan News

Former Detroit Emergency Director Kevyn Orr speaks to reporters after his speech at the University of Michigan on March 25, 2014. Credit: Michigan Photography.

Six of Michigan’s 11 cities under state emergency management since 1990 have also seen their municipal drinking water systems undergo changes, the most common being rate increases, water cuts for non- payment and privatization of water services or infrastructure.

That’s one of the findings of a new study that used Michigan cases to assess the predictability and rationality of state municipal takeovers, as well as the consequences for utilities such as utility lines. potable water.

Municipal takeover policies are often presented by supporters as rational, apolitical and technocratic responses to municipal financial distress. But a University of Michigan researcher and two University of Toronto colleagues have found that a city’s level of financial distress is not a reliable predictor of the likelihood of a state takeover. , while the race and economic status of residents, as well as a city’s level of dependence on the revenue-sharing state, were better predictors.

The study was published online September 14 in the journal State and Local Government Review.

“Our results show that decisions about state takeovers in Michigan are not entirely, or perhaps primarily, driven by objective measures of financial distress. Cities with a larger black population and a greater reliance on state funding are more likely to be supported, ”said the study’s lead author. Sara Hugues, environmental policy analyst and assistant professor at the UM School for Environment and Sustainability.

Sara Hugues

“We are also finding that cities that have been the subject of buyouts are more likely to see changes in their drinking water systems, such as tariff increases and privatizations. Whether these models are the product of racial prejudice, flawed policy and implementation, or broader political motivations is a question that could be addressed in future research. “

The most notorious recent example of water supply system changes during a Michigan municipal takeover occurred in Flint, which was under emergency management when critical decisions about supply protocols The city’s water and water treatment facilities were taken, and where emergency managers were reluctant to public concerns about the safety of the city’s drinking water. For nearly 18 months, from April 2014 to October 2015, the town of Flint delivered inadequately treated Flint River water to residents, exposing thousands of people to high levels of lead and other contaminants.

The other 10 Michigan cities that were under emergency management between 1990 and 2017, and which were analyzed in the study, are Highland Park, Hamtramck, Three Oaks Village, Pontiac, Ecorse, Benton Harbor , Allen Park, Detroit, River Rouge and Lincoln Park. .

A growing number of cities in the United States are facing serious financial problems requiring state support, and at least 19 states have passed laws allowing municipal takeovers in financial distress. In Michigan, municipal takeovers occur under the authority of Public Law 436 of 2012, one of the broadest and most permissive state municipal takeover policies in the country.

To study the implementation and consequences of PA 436 and the laws that preceded it, the researchers used a mixed-methods approach. First, financial and demographic data helped them understand state takeover decisions. Second, an analysis of media coverage captured the effects of the takeover on municipal drinking water services.

The aim of the first analysis was to operationalize the financial stress measures described by the State of Michigan and to identify the broader set of cities that could theoretically have been the subject of emergency management, but which have not been.

The researchers also measured community characteristics beyond financial health, including reliance on state income sharing, the proportion of black residents, and the median household income, which may have increased the likelihood of cities being targeted for emergency management.

Hughes and his co-authors expected that at least one of the financial metrics used by the state, or a composite financial health score based on all metrics, would be able to identify the 11 Michigan cities that were the subject of a takeover.

Surprisingly, this was not the case. The composite financial stress score captured only 45% of these cities. But a city’s level of dependence on state revenue sharing captured 82% of takeovers, while the percentage of black residents and median household income correctly predicted 64% and 55% of takeovers, respectively.

“These findings support previous work challenging the technocratic and rational basis of state municipal takeover laws and highlighting the politics inherent in municipal takeovers, particularly the prejudices and structural challenges faced by black communities. and poor, ”the authors wrote.

The media coverage portion of the two-pronged study showed that Michigan cities that were subjected to emergency management were more likely to have changes to drinking water services than 10 Michigan cities also faced to financial difficulties that have not been submitted to emergency management.

Six of Michigan’s 11 cities under emergency management have seen their drinking water systems undergo changes that were implemented to save money or reduce expenses. In many cases, these decisions have resulted in poor water quality, unreliable service and increased water bills, researchers say. The 10 comparative cities did not experience such changes.

“Drinking water systems are vulnerable to budget cuts and fee increases that accompany the balancing style brought in by emergency managers,” said Hughes. Under the auspices of emergency management, such decisions are made without public participation.

The other authors of the study are Andrew Dick and Anna Kopec, doctoral candidates at the University of Toronto. The work was funded by a grant from the Social Sciences and Humanities Research Council of Canada.

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