Michigan governor signs new emergency manager law

Michigan Gov. Rick Snyder (R) on Thursday signed several bills related to economic matters, including one to replace the emergency manager law that was recently repealed.

The new emergency manager law is intended to restore financial stability to distressed local governments and school districts by turning some of the power of local officials over to state appointed financial managers.

Snyder signed the bill only weeks after a similar emergency manager law was repealed by Michigan voters. Activist groups collected enough signatures to place a repeal of the law on the November ballot, describing the financial managers as "local dictators." The emergency manager law, known as Public Act 4, was repealed by about 52 percent of voters in November.

"This legislation demonstrates that we clearly heard, recognized and respected the will of the voters," Snyder said in a statement. "It builds in local control and options while also ensuring the tools to protect communities and schools districts' residents, students and taxpayers."

Unlike the previous emergency manager law, the new law provides four options to local governments and school districts deemed by a independent review team to be in a financial emergency. They can accept an emergency manager, enter an evaluation process, file for Chapter 9 bankruptcy, or develop a plan to resolve the situation and sign a consent agreement with the state. Local governments also have the ability to remove a financial manager after one year.

Financial managers are currently working in the cities of Benton Harbor, Ecorse, Flint, Pontiac and Allen Park, along with the school districts of Muskegon Heights, Highland Park and Detroit.

"Michigan is on the right path to a more prosperous future," Snyder added. "By bringing innovation and efficiency to government, coupled with the improvements we have made in our budget, tax, and regulatory environment, we are helping create a bright future for Michigan families."

[Flickr user Detroit Regional Chamber, Creative Commons licensed.]