The number of school districts and cities in Michigan that are in a state of financial emergency are rising.
Now, as many of them are handing over control to a state-appointed manager, it's important to ask: how effective is state oversight?
The City of Hamtramck is in a state of financial emergency six years after it emerged from state oversight.
An independent review team reported that Hamtramck isn't able to make its monthly pension payments and that the city's general fund deficit is expected to reach $3.3 million by the end of June. A structural operating deficit has existed in the city's general fund throughout the city's last three fiscal years.
A financial perspective on Hamtramck
Karen Majewski has been the Mayor of Hamtramck since 2005, and is also the immediate past President of the Michigan Municipal League.
Majewski said that Hamtramck's elected officials have been in conversation with the state for the last year and a half about their financial problems.
"[The deficit] isn't a surprise to us and it shouldn't be a surprise to the state because they've been well informed and working with us for a long time," Majewski said.
Mayor Majewski attributed the city's financial suffering to a combination of factors.
"The legislative and executive administration [in Michigan] have systematically denied promised funding to cities -- relief has been given to businesses but not to cities."
Though some of what Hamtramck's experiencing is also felt throughout the state, there are a few local issues that have contributed to the city's financial problems.
American Axle closed down, and the GM Poletown plant lost $2.7 million a year in revenue. Both were major sources for tax revenue for the city. Property value has also decreased in Hamtramck by about 30% in the last five years.
"It's not simply poor management, or not learning the lessons of earlier distress. To say cities need to change their act, get with the times, and be run more like a business attempts to absolve responsibility for other factors that are beyond the control of the city."
Majewski acknowledged the instability of city officials, but added that they conducted two searches for new city managers to no avail.
"In neither case did we hire someone because we didn't feel that we found the right person."
A missing link
"I'm not sure that Snyder has ever set foot in Hamtramck. I'd like to show him round our city. Snyder talks a lot about the importance of place and the importance of vibrant communities that engage their residents and create a sense of identification that can attract businesses because of the strong sense of place. Hamtramck has those things and I'm not sure he realizes that."
Majewski wondered if the governor's office recognizes how hard elected officials are working to make their cities viable for their residents.
She said that the new emergency manager law might alleviate some of the problems Hamtramck is experiencing. She hoped the law would create a closer working relationship between elected officials and the emergency manager.
"I would like to see a system in which [the emergency finance] function is the emergency manager's only function. The goal is to make a more vibrant and viable city and I'm not sure that that was the way things worked under the old law."
-- Lucy Perkins, Michigan Radio Newsroom
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