Under proposed Senate Bill 865, Detroit and other financially troubled cities would have the option of electing to declare municipal bankruptcy instead of being run by state-appointed managers under a proposal to replace the emergency manager law that state voters repealed last month, The Detroit News reported yesterday. The state's House Local, Intergovernmental, and Regional Affairs Committee advanced the bill to the House floor Thursday morning, less than a day after it was unveiled by Gov. Rick Snyder's administration. Snyder and Republican lawmakers are pursuing a replacement of Public Act 4, the emergency manager law voters rejected in the Nov. 6 election, contending that the repeal of the law doesn't eliminate the financial emergencies facing Detroit, Detroit Public Schools, Pontiac and other cities and school districts. The Snyder administration says that the current emergency financial manager law, Public Act 72, is not effective in addressing the cash flow and legacy costs that are pushing some Michigan cities and school districts to the brink of insolvency. Senate Bill 865 would give financially strapped cities and school districts the option of mediation, a financial consent agreement such as Detroit's current arrangement, an emergency manager or chapter 9 bankruptcy. Nick Ciaramitaro, a lobbyist for AFSCME, a union that represents municipal employees, said that the new bill "re-enacts" P.A. 4, adding that "the Legislature would ignore the will of the people and re-enact the bill… Under this bill, all roads lead to an emergency manager."
