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Wayne State University panel talks emergency managers, privatization

Some of the main players and experts on Michigan’s emergency manager law weighed in at a Wayne State University law school event Friday.

The symposium looked at what it calls the “restructuring of government through privatization and corporatization” throughout the state, particularly in Detroit.

The topic was chosen as financial troubles continue to plague many municipalities—and the state is frequently intervening through Public Act 4, a more powerful emergency manager law.

One former emergency manager—Pontiac’s Michael Stampfler—talked about that law’s limitations to really fix cities long-term structural problems.

Stampfler says privatizing city services can help cash-strapped municipalities balance their books. But he says he’s learned isn’t always a good idea.

“Private operations fail as well as public operations fail,” Stampfler said. “Oversight is the key.”

Detroit City Council member Saunteel Jenkins was a fellow panelist. She says it was good to hear a first-hand account of how emergency managers aren’t a “silver bullet or a magic pill.”

“You still have to sit down and work through difficult, complex issues, and no one person can do it,” Jenkins said.

Michigan State University economist Eric Scorsone was also a panelist.

He says the powers given emergency managers allows them to fix some short-term cash issues in cities.

But he says the law isn’t really set up to address longer-term costs.

“So I think the real solutions are gonna come from the city and state working together on legislative changes and other negotiations,” Scorsone said.

Scorsone says Detroit, for example, has a net worth of -$1.4 billion, when you include all its long-term liability costs. But Scorsone says those liabilities are an issue for cities throughout Michigan.

He says they mostly have to do with health care and pension benefits that were promised when “the state was very different.”

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.