PONTIAC, Mich., Feb. 28, 2023 — Pontiac’s city council unanimously adopted a resolution on Feb. 21 calling for the repeal of the Local Financial Stability and Choice Act, Public Act 436 (P.A. 436).
This law was enacted in 2012 and allowed the state to appoint emergency managers to be in charge of cities and school districts that are in financial distress. It authorizes the emergency manager to change the local government’s budget, sell, lease or assign assets, apply for state loans on the local government’s behalf, suspend collective bargaining agreements, modify or terminate existing contracts, exercise power over the local pension board, consolidate or eliminate local government departments, and decide whether to fill or create staff positions. According to the resolution, these were not subject to any local review or control and have had devastating financial consequences for many municipalities.
“We must repeal this law that gives near absolute power without any local oversight or insight to these emergency managers,” said state Rep. Brenda Carter (D-Pontiac). “I am ecstatic to see multiple cities and municipalities supporting and calling for my bill to be passed.
“As a former member of the Pontiac School Board, I know firsthand the damage to communities that emergency managers cause. These unelected individuals come into low-income communities and completely supersede the elected body. As with the school district of the city of Pontiac, the consent agreement consultant, another form of emergency management, came into Pontiac and sold off assets worth millions for pennies on the dollar; all of this in the name of saving money.
“Creating emergency managers was a terrible idea that opened the door to discrimination against and the decimation of low-income, primarily Black communities. It’s time we right this wrong by repealing this law and returning the power to the people.”
Carter introduced House Bill 4065, which would repeal P.A. 436, on Feb. 1 and it is currently in the Local Government and Municipal Finance Committee.