Detroit Consent Agreement and Emergency Manager Laws

August 20, 2012

MSU Extension has created a series of Frequently Asked Questions (FAQ) bulletins and other resources to help the public understand the key concepts, terms and legal framework of the Detroit Consent Agreement and related issues, such as Public Act 4, commonly known as the "Emergency Manager Law" and its replacement Public Act 436, which are laws governing cities and school districts in fiscal crises. Understanding these issues helps to clarify roles, responsibilities and accountability of all involved; as all levels of government and residents in Michigan will play important roles in successfully handling the financial crises in Detroit and elsewhere in the state.

Watch an Adobe Connect webinar recording of MSU Extension specialist Eric Scorsone giving a presentation about PA 436. Scorsone talks about all facets of PA 436, issues facing Michigan including chronic, year over year deficits, and how the new law it differs from PA 4.

When Michigan voters struck down Public Act 4 (commonly known as the "Emergency Manager Law"), the Michigan legislature passed a new law concerning cities and school districts in fiscal crises. The new law is different in several key areas and this new FAQ examines the new Public Act 436 and how it differs from PA 4.

The events surrounding Public Act 4 (commonly known as the "Emergency Manager Law") have presented numerous legal and operational questions, many of which will be worked out through the legal system. This FAQ outlines may of the questions, identifies some sources of guidance. during this period of confusion, and serves as a platform for better understanding the challenges in addressing local government financial crises. 

In an effort to deal with its ongoing financial difficulties, the City of Detroit's FY 2013 budget cuts staff by 20 percent and imposed changes collectively known as the City Employment Terms to further reduce personnel costs. This FAQ outlines the events leading to the CET, discusses the implications, and lays out further questions to consider as the city continues to address its financial crisis. 

This FAQ explores issues related to the City of Detroit's Fiscal Year 2013 budget, including those issues that directly affect residents and taxpayers. Detroit is representative of many older, industrial cities that have lost population and taxbase while supporting a government organization and infrastructure built by previous generations. Detroit's successes and setbacks will provide important lessons for municipal leaders who are balancing fiscal constraints with providing reliable, quality services.

This FAQ outlines the City of Detroit's decision to adopt multi-year budgeting, which also serves as the city's official deficit-elimination plan. 

This FAQ outlines the broad details of the Detroit Consent Agreement shortly after the details were released to the public. The bulletin also covers issues related to what a consent agreement is, Public Act 4, the Financial Advisory Board, the revenue conference, and compares the Detroit Consent Agreement with previous agreements in New York City and Philadelphia.

This FAQ was developed before the official Detroit Consent Agreement was drafted. It dealt with the legality of a possible consent agreement as well as many issues surrounding the recently passed Public Act 4, which gave Michigan the authority to conduct a financial review of the City of Detroit's finances. 

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