LANSING—State Sen. Phil Pavlov introduced legislation Wednesday that would help protect local taxpayers from long-term debt while helping ensure that vital services such as public safety and education are maintained.
Senate Bills 153 – 158, known as the Local Government and School District Fiscal Accountability Act, would streamline the current process for installing emergency managers in municipalities and school districts in severe deficit.
“The state must be responsive to the needs of its residents by helping communities and school districts avoid long-term liabilities and even bankruptcy,” said Pavlov, chair of the Senate Committee on Education. “These measures make it possible for the state to intervene earlier and more efficiently in cases of extreme distress.”
Under Pavlov’s legislation, emergency managers could negotiate contracts, direct academics, address corruption on the part of local officials and recommend consolidation of local units.
As a safeguard, the bills require a seven-step review and appeals process before the governor could declare a financial emergency, as well as various levels of oversight. If an emergency does exist, the state treasurer would place the local government into receivership and appoint an emergency manager.
In addition, the state treasurer or superintendent could give some of the powers granted to an emergency manager to a locally appointed or elected official before a local unit goes into receivership.
“Michigan is facing a potential scenario of multiple municipalities and school districts in severe financial duress. By acting now, we can provide appropriate tools to correct these situations and protect the public trust,” said Pavlov, R-St. Clair Township.
The Senate Committee on Education heard testimony on Pavlov’s legislation on Wednesday.