Manifestly Dysfunctional?

Michigan Gov. Rick Snyder late last week declared the city of Allen Park to be in a state of fiscal emergency due in part to its struggle to pay bonds issued for a now-failed film studio—giving Allen Park officials until next Monday to request a hearing to appeal the decision. Allen Park faces a chronic general fund deficit, severe cash-flow problems, and political infighting that the state review team said rendered the City Council “manifestly dysfunctional.” In his declaration, the Governor said: “We are committed to helping Michigan's struggling communities, and while declaring a financial emergency in Allen Park is not a decision we like to make, it is a necessary one to restore the city’s financial stability and put it on a path to success.” Absent a successful appeal, Allen Park would become the eighth local government to be placed under the state-controlled fiscal distress program. Three other jurisdictions, including Detroit, operate under consent agreements with the state. Allen Park is a formerly wealthy suburb of Detroit that, like many other Michigan cities, has suffered from declining property values and high unemployment over the past several years. Governor Snyder announced his decision ahead of a highly anticipated ballot referendum in November that asks residents to overturn Public Act 4, the controversial emergency management law that governs how the state deals with fiscally stressed municipalities. If overturned, the previous emergency management law, which lacks many of the powers of the new statute, will become law.