(In Dec 13 item, paragraph 5, corrects month when the state
began relying on old emergency manager law)
* Bill to replace previous emergency manager law
* New law to keep intact ongoing review process like Detroit
* Local officials will be given a set of options
By Karen Pierog and David Bailey
Dec 13 A bill that will give fiscally troubled
local Michigan governments like Detroit's, as well as school
districts, a set of options ranging from bankruptcy to
arbitration was approved by the Michigan Senate on Thursday.
The bill, which senators approved by a 23 to 15 vote, would
replace Michigan's previous emergency manager laws, including a
2011 law that was repealed by voters in November.
The Michigan House approved the measure on Wednesday during
the state's active lame-duck session, which also produced
controversial right-to-work bills.
The new emergency manager bill, which would take effect in
about 90 days, was pushed by Republicans, who control both
chambers. It heads next to Republican Governor Rick Snyder for
After the 2011 law was suspended in August pending the
outcome of the Nov. 6 state-wide vote, the state r elied o n a
former, weaker law to keep in place state-appointed managers for
five cities and three school districts and consent agreements
for three cities, including Detroit.
The new bill would keep intact any ongoing review process
like the one launched for Detroit this week, as well as existing
consent agreements and appointed managers for Michigan local
governments and school districts.
Senator John Proos, a Republican whose southwestern Michigan
district includes the city of Benton Harbor, which is under the
control of an emergency financial manager, said cooperating with
the state to fix local financial problems does work.
"This bill gives us a chance to have an early warning
system," Proos said in support of the bill. "Then a community
may choose what is the best for them".
AN ASSAULT ON DEMOCRACY
Democrats opposing the new measure said Thursday the
legislature was simply ignoring the decision by voters in
November to repeal the previous emergency manager law.
"This is an assault on Democracy, this is an assault on the
constitution," said Senator Coleman Young II, a Democrat from
Detroit. "It's wrong. It's illegal. It's despicable. The people
Young is the son of the late Detroit Mayor Coleman Young.
The new law would give the elected officials of local
governments determined to be in a fiscal emergency the option to
choose between municipal bankruptcy if the move is approved by
the governor, an emergency manager, arbitration with a neutral
party or a consent agreement. The chosen option would need to be
approved by the governments' elected officials.
Detroit, which has been operating under a consent agreement
with the state since April, was placed under a preliminary
review by Michigan Treasurer Andy Dillon on Tuesday. The review
could potentially lead to the city having an emergency financial
manager in the aim of quickening the pace of financial reforms.
The move came even after the Detroit City Council signed on
to some reform measures that led to the release on Thursday of
$10 million in bond proceeds state officials had been holding in
Detroit Mayor Dave Bing said the money will help the city
meet other conditions laid out by state officials that could
result in the release of another $20 million.
(Reporting by Karen Pierog in Chicago and David Bailey in
Minneapolis; editing by Tiziana Barghini and Todd Eastham)