From the Mackinac Vault: Motown’s Emergency Manager Recommendations

The Mackinac Center for Public Policy’s job is to be prescient and offer policy solutions that may not seem palatable at the time they are introduced.

When we authored our first education choice study in 1991, few understood the concept. Today, Michigan enjoys cross-district schools of choice and charter public schools. Indeed, charters are so popular in Detroit they now outnumber conventional schools in the city. The same goes for right-to-work legislation. Many questioned and criticized the Mackinac Center when we first started recommending RTW as a policy change in 1992. Today it is the law of the land.

Lately, it is hard not to notice that warnings we repeatedly offered Detroit went unheeded. Only now are our recommendations being discussed as viable policy options.

In 2000, Morey Fiscal Policy Initiative Director Michael LaFaive released a Detroit-specific edition of Michigan Privatization Report that — even then — painted a grim financial picture for the city. In one article LaFaive warned:

If Detroit’s future expenditures were relatively stable, this financial snapshot still would be cause for concern. But the city is looking at two new outlays of monstrous proportions: funding the pension obligations of current and future city employees, which could cost up to $3 billion, and fulfilling requirements under several federal environmental acts, which will cost billions more.

The Mackinac Center gave Detroit and state leadership a 13-year warning on pensions. Now pension responsibilities are a cause of great consternation to the city’s new emergency manager.

LaFaive’s recommendations for reform ranged from selling Belle Isle and the Detroit Public Lighting Department to contracting out for water and waste-water management. No such efforts were ever adopted by the Motor City.

In 2005, LaFaive again warned the city of its financial troubles, but this time in a Detroit News op-ed titled: “Detroit Can’t Postpone Economic Reform: Here are five ways the city can restore prosperity and avoid state receivership.”

Now that an EM has been put in charge of righting the Motor City’s financial ship, he is discussing reform ideas — such as ridding the city of its lighting department — that were first brought up by the Mackinac Center years ago.