Live chat on emergency financial manager...
 
10:58
Jonathan Oosting: 
Hi everyone. Jonathan Oosting here with MLive.com. We're getting set up and prepared for what we hope it going to be a great conversation about the emergency manager law and referendum.
Friday September 28, 2012 10:58 Jonathan Oosting
10:59
[Comment From State Rep Al PscholkaState Rep Al Pscholka: ] 
Hi, State Rep. Al Pscholka here.
Friday September 28, 2012 10:59 State Rep Al Pscholka
10:59
[Comment From Bert JohnsonBert Johnson: ] 
Good morning.
Friday September 28, 2012 10:59 Bert Johnson
11:00
Jen Eyer | MLive.com: 
Feel free to start posting your questions and comments, readers. We'll post comments as they come in, but we'll try to post the questions in order to make this easier to follow.
Friday September 28, 2012 11:00 Jen Eyer | MLive.com
11:00
[Comment From Tom IvackoTom Ivacko: ] 
Hello, Tom Ivacko here
Friday September 28, 2012 11:00 Tom Ivacko
11:00
[Comment From Meegan HollandMeegan Holland: ] 
Hi everybody. Welcome to our chat with Sen. Bert Johnson and Rep. Al Pscholka about Proposal 1, the emergency manager law referendum.
Friday September 28, 2012 11:00 Meegan Holland
11:00
Jonathan Oosting: 
Welcome, gentleman.

As background for readers, State Rep. Al Pscholka (R-Stevensville) sponsored the legislation that became Public Act 4 and remains a big supporter of the law. His district includes Benton Harbor, which has been in receivership since 2010.
Friday September 28, 2012 11:00 Jonathan Oosting
11:00
Jonathan Oosting: 
State Sen. Bert Johnson (D-Detroit) is a vocal critic of Public Act 4. His district includes Highland Park, where an emergency manager recenly hired a charter operator to run the public school system, and part of Detroit, which is operating under a consent agreement with the state.
Friday September 28, 2012 11:00 Jonathan Oosting
11:01
Jonathan Oosting: 
Tom Ivacko is the administrator and program manager of CLOSUP at the University of Michigan's Gerald R. Ford School of Public Policy, which this week published results of a spring survey showing that local officials across the state are sharply divided on Public Act 4 and the powers it affords state appointees.
Friday September 28, 2012 11:01 Jonathan Oosting
11:01
[Comment From Meegan HollandMeegan Holland: ] 
I'll be moderating the chat, with the help of Jen Eyer, MLive's community engagement specialist.
Friday September 28, 2012 11:01 Meegan Holland
11:01
[Comment From Bert JohnsonBert Johnson: ] 
Good morning.
Friday September 28, 2012 11:01 Bert Johnson
11:01
[Comment From State Rep Al PscholkaState Rep Al Pscholka: ] 
I know folks like to call it the Emergency Manager law, the name of the legislation is the Fiscal Accountability Act.
Friday September 28, 2012 11:01 State Rep Al Pscholka
11:02
[Comment From NDFan10NDFan10: ] 
My first question, and biggest concern, is what happens if Proposal 1 gets voted down, that is, Public Act 4 is repealed? What do we do with financially struggling communities then?
Friday September 28, 2012 11:02 NDFan10
11:03
[Comment From Meegan HollandMeegan Holland: ] 
Welcome NDFan10. Great question!
Friday September 28, 2012 11:03 Meegan Holland
11:03
[Comment From State Rep Al PscholkaState Rep Al Pscholka: ] 
In some states, the alternative is
Friday September 28, 2012 11:03 State Rep Al Pscholka
11:04
[Comment From State Rep Al PscholkaState Rep Al Pscholka: ] 
In some states, the alternative is Chapter 9 bankruptcy, which is probably the most undemocratic choice. A federal judge can rip up contracts, sell assets, and strip services. Plus all taxpayers would be on the hook for the liabilities.
Friday September 28, 2012 11:04 State Rep Al Pscholka
11:04
[Comment From Kris HKris H: ] 
To SR Pscholka, what is it about democratically elected government that you believe to be incompatible with addressing financial concerns; particularly when most of the concerns have resulted from Michigan being in a single-state depression and not due to mis/malfeasance.
Friday September 28, 2012 11:04 Kris H
11:05
[Comment From Bert JohnsonBert Johnson: ] 
There always has to be a provision in place to safeguard against insolvency. I am not against the state and the local community working together to create a viable plan. A lot of what is happening today with Emergency Managers, though, rests with what they think is best and is unproven.... Experience with this law indicates that the cities and school districts that have come under control of an EM have not improved as a result of that oversight.
Friday September 28, 2012 11:05 Bert Johnson
11:06
[Comment From Meegan HollandMeegan Holland: ] 
Thanks Kris H, for the question. Rep. Pscholka is typing away!
Friday September 28, 2012 11:06 Meegan Holland
11:07
Bert Johnson: 
My point is, let's not make bankruptcy the boogeyman it is not.
Friday September 28, 2012 11:07 Bert Johnson
11:08
[Comment From State Rep Al PscholkaState Rep Al Pscholka: ] 
There is an easy way to avoid this legislation - pay your bills, don't take on huge debt, live within your means. That's 99 percent of the governments in the state. For others, we need an early warning system and the tools to help temporarily. That's the intent.
Friday September 28, 2012 11:08 State Rep Al Pscholka
11:08
State Rep Al Pscholka: 
Ecorse has improved, has a balanced budget, we have seen progress in Benton Harbor, and reforms in Pontiac, Flint, and DPS have saved taxpayers 100 million.
Friday September 28, 2012 11:08 State Rep Al Pscholka
11:08
[Comment From lcannon1lcannon1: ] 
To senator Johnson. What would be an alternative to this problem?
Friday September 28, 2012 11:08 lcannon1
11:08
[Comment From Kris HKris H: ] 
Point of record: According to the Federal Courts website, a federal judge cannot force the sell of assets. http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter9.aspx
Friday September 28, 2012 11:08 Kris H
11:09
[Comment From Frank JoyceFrank Joyce: ] 
It is not the case the bankruptcy is more undemocratic. Chap 9 of the federal bankruptcy code compels the involvement of local elected officials. Pa-4 explicitly excludes them from the process. Further, bankruptcy brings bondholder to the table. PA-4 precludes that.
Friday September 28, 2012 11:09 Frank Joyce
11:09
[Comment From Bert JohnsonBert Johnson: ] 
Additionally, in bankruptcy court, the immediate goal is to stop the bleeding and not simply to sell off assets. There has been enough evidence of corporate and private personal bankruptcies to suggest that entities can emerge from bankruptcy healthier than when they started.
Friday September 28, 2012 11:09 Bert Johnson
11:10
Bert Johnson: 
The results in any of those entities, Rep. Pscholka, are yet to be proven. Particularly in DPS, where there have been two Emergency Managers, these results have not been seen. Indeed, we have seen a ballooning deficit, corruption and cronyism.
Friday September 28, 2012 11:10 Bert Johnson
11:10
[Comment From RobRob: ] 
Bankruptcy is the boogeyman, it is one single judge making the decisions. While the EM law is tough the people of the State of Michigan can hold our elected officials to account for what the EM chooses to do.
Friday September 28, 2012 11:10 Rob
11:10
State Rep Al Pscholka: 
Communities that have gone through it, like Vallejo California have seen 12 hours of police protection a week, and five years of legal bills. Not good.
Friday September 28, 2012 11:10 State Rep Al Pscholka
11:10
[Comment From Lucille B.Lucille B.: ] 
What financial burden does bankruptcy shift to the taxpayers?
Friday September 28, 2012 11:10 Lucille B.
11:11
[Comment From Stephen BoyleStephen Boyle: ] 
I believe the opposite - that the loss of democratic process happens with an emergency manager. The process of bankruptcy is to restructure systems and gain debt forgiveness in the process. Public Act 4 has no debt forgiveness, and actually increases municipal obligations if assets are not surrendered.
Friday September 28, 2012 11:11 Stephen Boyle
11:11
Bert Johnson: 
An alternative is a law that allows for cooperation between the State Treasurer's office and the local elected officials to make decisions in the best interest of the city or school district going forward. It should be noted that the Representative and the Governor crafted this legislation without input from one Democratic Senator or Representative, when the vast majority of us represent areas that have been taken over... our input can be valuable.
Friday September 28, 2012 11:11 Bert Johnson
11:12
[Comment From B.H. TurnaroundB.H. Turnaround: ] 
Part of the problem in lack of improvement is the lack of elected officials and efm's working together. Both sides are at fault and the war will not improve the bottom line. B.H. cannot improve with the verbal war continuing back and forth.
Friday September 28, 2012 11:12 B.H. Turnaround
11:12
[Comment From Stephen BoyleStephen Boyle: ] 
Detroit has police working 12 hour shifts. When Mayor Bing was confronted about that last night he and his staff walked out of the community meeting.
Friday September 28, 2012 11:12 Stephen Boyle
11:12
Bert Johnson: 
Rob, they cannot hold the EM accountable. Those decisions are final and if there is significant damage to the city or school district, nothing can be done.
Friday September 28, 2012 11:12 Bert Johnson
11:12
[Comment From JoshJosh: ] 
Rep. Pscholka - You just claimed federal judges have the capability to sell off public assets, and according to Kris H's link that is untrue. Are you going to respond to that point?
Friday September 28, 2012 11:12 Josh
11:13
State Rep Al Pscholka: 
We had lots of discussion and opportunities for this bill, including hours of hearings and heard from lots of voices as this was being crafted.
Friday September 28, 2012 11:13 State Rep Al Pscholka
11:13
[Comment From B.H. TurnaroundB.H. Turnaround: ] 
Bankruptcy also can force other surrounding communities to merge with the one going bankrupt. This area does not want that to happen and all want B.H. to prosper and turnaround.
Friday September 28, 2012 11:13 B.H. Turnaround
11:13
Jen Eyer | MLive.com: 
Stephen, you're right about the meeting shutting down early: http://www.mlive.com/news/detroit/index.ssf/2012/09/detroit_meeting_cut_short_when.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+detroit-news+(Detroit+News+-+MLive.com)
Friday September 28, 2012 11:13 Jen Eyer | MLive.com
11:13
Bert Johnson: 
Lucille, it does not shift to the taxpayers. Taxpayers are already on the hook for paying for their government. We are either talking about taxation without representation or taxation by a representative form of government. In the instance of bankruptcy, that taxation is overseen by a neutral arbiter aimed a being apolitical and financially astute.
Friday September 28, 2012 11:13 Bert Johnson
11:14
State Rep Al Pscholka: 
You have seen judges sell water plants and other assest as part of the restructurings. The idea is to avoid bankruptcy.
Friday September 28, 2012 11:14 State Rep Al Pscholka
11:14
[Comment From James Hohman, MCPPJames Hohman, MCPP: ] 
You guys are talking about bankruptcy as if it's an alternative to the EM. In Michigan right now the only way that a local government can enter bankruptcy is if an EM takes them there.
Friday September 28, 2012 11:14 James Hohman, MCPP
11:14
[Comment From James Hohman, MCPPJames Hohman, MCPP: ] 
The state is already begging local governments not to approach insolvency by requiring balanced budgets, plans to resolve deficits, and emergency cash when it is necessary. Only elected officials that refuse appropriate management of these rules are in danger of a state-appointed receiver.
Friday September 28, 2012 11:14 James Hohman, MCPP
11:14
[Comment From Lucille B.Lucille B.: ] 
Also, how would bankruptcy affect the State's credit rating, and ability to bond?
Friday September 28, 2012 11:14 Lucille B.
11:15
[Comment From Stephen BoyleStephen Boyle: ] 
What I've not seen is accountability from Mayor Bing's administration in offering a organization chart or addressing redundant processes or staff - those are things an industrial engineer would know are required and a bankruptcy court would suggest. PA4 is sacrificing constitutional rights through TAXATION WITHOUT REPRESENTATION.
Friday September 28, 2012 11:15 Stephen Boyle
11:15
Bert Johnson: 
You can have as many hearings as you'd like, but when a politically driven bill is forced down the throats of lawmakers in the Legislature, what you get is a politically slanted bill like Public Act 4. On the Senate floor alone, there were 18 Democratic amendments offered on items such as limiting conflicts of interest, limiting EM pay, and more. None were adopted.
Friday September 28, 2012 11:15 Bert Johnson
11:15
State Rep Al Pscholka: 
It would impact our credit rating negatively which we have worked hard to improve, making it difficult for all units, and for economic development.
Friday September 28, 2012 11:15 State Rep Al Pscholka
11:15
[Comment From Stephen BoyleStephen Boyle: ] 
The only reason bankruptcy isn't allowed is the law which is a referendum for removal - it is suspended and PA72 is NOT ACTIVE LAW. Look up MCL 8.4 to know what a repeal does.
Friday September 28, 2012 11:15 Stephen Boyle
11:16
[Comment From John BarnesJohn Barnes: ] 
For both representatives: What is your reaction to a column today by Tim Skubick,in which Senate Majority Leader Randy Richardville says that even if voters strike the law down, a new version will be crafted?
Friday September 28, 2012 11:16 John Barnes
11:16
[Comment From Stephen BoyleStephen Boyle: ] 
The governor, AG, and treasurer don't want the banks to have to negotiate debt. The banks are why we have gone into the problems we have through predatory lending.
Friday September 28, 2012 11:16 Stephen Boyle
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