In Michigan, the state takes over broken cities by appointing an emergency manager with unilateral power to hire and fire, to sell or buy, to keep the town or recommend its dissolution. Under the new Republican majority, Michigan cut the money it used to share with local governments. Towns and cities and school districts that were already struggling now face either getting emergency managers or cutting their budgets to meet the new austerity. Muskegon Heights, where an emergency manager is converting the entire school system to for-profit charters, and Highland Park, where an emergency manager just recommended the same plan, become cautionary tales for towns like Pontiac, where the school district is selling off property and slashing staff to stave off an emergency manager.
Even if it's on a whole other scale, Michigan is not the only state where the dynamic is at work. In the state of Rhode Island, for instance, a town takeover comes with a "receiver" for boss; the town is put in "receivership." Today in the New York Times, Joe Nocera takes note of two state lawmakers from Woonsocket, one with ALEC ties, who used their positions in the legislature to keep their district in the poorhouse and advance their ideological goals. Nocera writes:
The fact that their town had a big budget deficit meant that if they played their cards right, they could do a lot more than just fix the schools’ problem. They could actually shrink the town government!
And how does one go about doing that? By refusing to go along with tax increases and forcing the city to the edge of bankruptcy, thus raising the possibility of bringing in a receiver. “You never move faster than when you have a piano hanging over your head,” [Rep. Jon] Brien told me. “The receiver is that piano.”
What the ALEC lawmaker is describing is government by fear. The policy choice is between trying to fix a city by starving it or reinvesting in it. Judging from what has happened Michigan so far, starving cities and taking them over has led mostly to the same starved, taken over cities breaking again -- if they were ever fixed -- and returning to state control.
(Woonsocket photo by @pablocommotion/Flickr Creative Commons)
Leave a Comment:
"The definition of insanity is doing the same thing over and over and expecting different results."
So what I get out of this article is that the government is forced to live with in their means. I believe that is a new Idea for democrats.
Right. We'll all remember that next time a republican takes us into TWO wars while cutting taxes and hiding all the war costs in bureaucracy.
Or have you missed all the facts that government spending under W. Bush and Reagan was higher than pretty much everyone else? It's just that their spending all went to their rich buddies instead of regular people who need help.
The reason the frightwingers are so determined to run the President off is they know the economy is recovering (albeit slowly) and they want to be in office when it does return to normal. Then, despite the fact that they created this mess in the first place, they will try to take all the credit for the recovery.
Chemdmd - That's funny, because what I get is that GOPers reduced those means, to artificially take control and expand their powers over the populace. You must have special reading glasses; most people call it a blindfold.
So the solution is to just tell all of the property owners in the city of Woonsocket that you have to take a 13% tax increase in a one year period? That is the only solution that has been put on the table other than receivership at this point. I find it difficult to say, but this is the one time I am backing chemdmd (hopefully I don't spontaneously combust). I would not sign on to a 13% tax increase in my town EVER. There has to be a more even handed solution than to always stick it to the property owner (myself being a property owner in RI). Grumpyliberalbastard, you need to read the link "Joe Nocera takes note", which explains that there was more going on than just the Republican legislators that blocked the 13% tax increase. The city offered no solutions to fix the problems other than raising taxes - that is unacceptable.
The real problem was in the outgoing governor (who was a Republican) balanced his budget by cutting aid to cities and towns (the punt the ball solution). Once the state aid dried up, the city was put in a bigger hole than just the overspending the school committee did. While the local representatives might have been engaging in some politics for personal gain by using the "starve the beast" mentality, Woonsocket was in trouble either way.
So, you admit that the state GOP, through the governor caused the problem by reducing the "means" within which they needed to live, as Chemdmd tried to skirt around by implying that it was the spending increasing and not a drastic drop in income through no fault of their own. Now, if only they would reverse those budget shenanigans, things would be closer to alright.
Hey Grumpy... I am with you. I think that the only reason a lot of people vote republican is because they just can't think for themselves.
@Grumpyliberalbastard - OK back up a little and I will give you some RI perspective. First off, the GOP has ZERO control of RI. RI has been fully in the control of the Democratic party for the last 70+ years. There are currently 65 Democrats in the House, and 10 Republicans - there is no way the GOP can do anything without the Democrats going along, period. While it sounds great saying that the GOP reps starved their own town, there was a much larger majority of Democrats that could override their lack of interest in the supplemental tax for their town if they felt it was necessary. The bottom line was that no one - Dem or Repub - wanted to vote for a 13% supplemental tax that would have only been a band-aid. This is an election year, and none of the elected officials wanted to go on record as supporting another tax (we have enough in RI already).
Okay, I may spontaneously combust by being on this site, but here goes. The former Governor was GOP, but the General Assembly is solidly Dem. The 13% tax levy increase was only part of the answer to make up for state aid cuts over three years of over $10 million (about 25% of our tax levy). Our tax levy has risen by 29% over the last five years and several concessions in contracts have been negotiated along with drastic cuts in municipal services. There is room to do more, but how that is done is what is in question here.
The city budget is balanced but the school department could never seem to cut enough to keep up with the loss of state aid under an education funding formula passed by the Dem controlled General Assembly which has reduced the aid to the urban poor while fattening up the suburban well off crowd.
I tried desperately to show them the crippling flaws in their "best education funding formula in the country" and offered them alternatives, but I was ignored. I pointed out to them how they would cripple the urban centers of the state, but they are all smarter than me, I guess. After all, the only cities and towns struggling financially in Rhode Island are the urban areas with the greatest educational needs! Oh, sorry, maybe they ain't so smart after all.
The rest of the solution to this disaster (created by the Dem. General Assembly) was to have been to honestly negotiate new wages and benefits for employees and retirees, but thanks to our friends in the state house, we will need to go to plan B.
Now that we couldn't get some stabilization from which we could plan our city's future, the entire gap will have to forced upon the employees and retirees by either breaking the contracts (State Superior Court lawsuit) or through a receiver and the threat of Federal Bankruptcy. Either way, the taxes will need to continue to go up to pay capital improvements and infrastructure needs ignored for far too long, educational supplies that our schools do without, educational programs cut only in city schools, the unfunded OPEB liability and pension shortfalls.
For the record, the Mayor is a Republican and I am the City Council President and member of the GOP. I am also a CPA and I think I know a little better what a sound financial plan looks like than my state reps.
We will just have to play the hand we have been dealt, but before anyone here wants to blame the GOP in Woonsocket or anywhere else in RI for taking it out on the employees and retirees, take your complaint to my Dem. controlled General Assembly. They created the mess, I gave them legislative answers to solve it and they ignored my submitted legislation. It almost feels like they want us to fail. We won't!
It is SO obvious that Romney as well as all other right-wingers are determined to privatize everything they can get their hands on: schools, prisons, social security, etc etc etc. If something doesn't make a profit for some billionaire, then it is worthless......scary beyond words.
The same words are found in 'The Communist Manifesto.'
What is scary to me is how few working class people understand what privatization is and how it affects them. What may be even worse, I doubt most working class could even express pros and cons of capitalism.
How is this bad from a political point of view?
The Republicans freak out, piss everyone off with their crazy and get hammered flat no matter the amount of money spent by corporate run campaigns.
How is this bad?
It wouldn't be bad - if that is what actually happened. For them to "get hammered flat" implies you think the majority of voters will come to their senses and recognize the Republican agenda for what it is.
What's scary is that that may not happen.
"People" are way overrated, and no longer needed to any extent in today's economy.
Some will find this comment alarming, others quite comforting. Corporations, after all, are people, my friend, and will function smoothly without needless meddling by outsiders.
I'll believe Corporations are People as soon as Texas executes one!
Davefromberkeley, laughing me arse off right now, so true!
corporations are people, Mit Rommney thinks the trees in Michigan are just the right height. Well if corporations are people, and corporations are make of paper, and paper is made from trees, then trees must be people too. HMMM
The real point of this article is how dumbed down Americans have become. I mean after 30+ years of "trickle down" that has only trickled up, tax breaks for the corporate & 1%, hemorrhaging of American jobs to low/no wage nations, along with divide & conquer (wink, wink) politics - the fact that working people are still voting for the GOP is an anathema!
I mean in Wisconsin where they busted up the UNION, UNION people actually voted for the GOP, really, WTF?!? Maybe more white people need to be made much worse off by these GOP that they continue to vote into office, before they'll be willing to see that the GOP doesn't give a dayum about them either - they only cater to the corporate & 1%!!
I fully understand your point of view, Zora. However, that extremely loud WHOOSHING sound you hear is the sound of your point going over the heads of most people (sadly, this includes some of my friends).
I think that this can be attributed to disinterest and that some people are just trying to make it day to day.
I read that trickle down means giving the 1% more food for their banquets so that more scraps fall from their table for the rest of us. As if. And yet people vote them in. "Mr/Ms rep/senator is okay in my book because he/she's a good christian, womb legislator and protector of the unborn." And that same legislator enacts laws that affect the already born who should've known better than to vote them in!
@Casere - That "disinterest" by your friends is about to wreck this nation big time. I too am trying to make it day to day - but at what point do these people actually start to think, see the big picture, connect the dots, smell the coffee?
Zora, I totally agree with you. I see the ignorance every day at work. One friend made a thought provoking comment one day, he said you will see change when people start going hungry. Sadly, this is starting to make sense to me.
Sadly, people are already going hungry....the state I live in pays out over $ 1 billion in food stamp assistance per year, and that figure is growing. Yet, the Paul Ryan's of the world want to cut the safety net so they can give additional tax breaks to their owners. that's right.....owners ! The 1 percent owns the republican party, or at least it's leaders.
I think that most people across the country have that "NIMBY" (Not In My Back Yard) attitude about this Emergency Manager situation in Michigan and now, the Receivership in RI.
When (not IF), it happens to their town/city due to voting Republicans into office, maybe then they'll understand, but by that time, it will be too late.
I'll /facepalm myself, since I didn't check whether the city I recently moved to could have that happen (Emergency Manager / Receivership).
That's how you establish dictatorship in democracy. If they win, they will do this on a national level. And watch our democracy vanish.
As usual MSNBC gets the story wrong. The reason that the democratic general assembly would not allow them to raise taxes is because Woonsocket is already a depressed city. The average wage in this city is under $35,000 a year. BTW RI has a democratically controlled general assembly, a progressive Governor, and is the bluest state in the union, run by the unions.
Christ Almighty...What the Hell is happening to my country?
They just stole the recall in Wisconsin with rigged machines..
Your Democracy is already falling.
I'm 64 and for the first time in my life I am very worried about the possibility of a Republican president....not just because he's a Republican, but because I think he is 'owned' by the big corporations and the CEO's who run them. And I agree, the 'people' are oblivious to the political reality. I hear my children say, "Don't worry....one person can't change things so drastically. It takes the whole group." Well, unfortunately there's a whole raft of these idiots who are selling the middle class down the river!
First they came for the Socialists, and I did not speak out--
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out--
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out--
Because I was not a Jew.
Then they came for me--and there was no one left to speak for me.
~ Martin Nieomoller
No wonder America is such a @!$%# country, if this is how it's run. It's worse than a 3rd world country. America is going to be coming last in education for a long time.
U.S. citizens are too uninformed to realize that for-profit government has been tried before with disastrous results. We are allowing a small group of business people to colonize our own country. It won't be long before we owe them all tribute.
I suppose we have to let this idea of emergency managers and forced austerity to play out so that the problems with these approaches bear fruit. These things will also turn voters against their state representatives who are advocating these approaches. Certainly, there must be enough voters in Michigan who have seen enough and are ready to toss their legislators. It will take time for these radical state governments to change since the governors will not be up for reelections for a while.
Unfortunately, as what happened with GWB, by the time the frightwing governors are voted out, the damage will already be done.
...and then the Dems will be blamed for not fixing it fast enough.
Their "forced austerity " never includes raising toier taxes from the LOWEST rate in 70 years, closing corporate loopholes, preventing corporations from buying favorable legislation, etc, etc,...... austerity for the middle class, corporate welfare & extra perks for the lobby buying corporations...... that is the fascist way.... corporations have been vying for control of this country for many many decades.... there were times, like in 1933, where they came close to succeeding..... this is a defining time in our country's history, they may succeed this time .... with their anonymous $$$$$$$, bought or cowering Congress, paid "think tanks" writing legislation...... Norquist wasn't kidding when he said " We don't need a leader in the WH.... we know where we want to go. All we need is someone with enough digits to sign what we send over."
Mitt Romney thinks the trees are the right hieght in Michigan. He says corporations are people. Well if coroporations are people, and corporations are created using paper, and paper is made from trees, then trees must be people too. Therefore trees have more rights than people, therefore Romney must be nice to the trees or he wont get elected.
I mean no offense to people here. I am a Rhode Islander. We are essentially a one party state. The Democratic party has been in power for decades now. We elected a substance abusing, professional politican in our state for nothing more than his family name. I agree that Bush was a horrible president, but members of both parties of Congress happily ponied up and followed Bush into those two wars.
It frustrates me that everyone in this state is rather blind to the Democratic party line. I also find the term liberal disingenuous. I prefer progressive. Progressives actually plan things out, and have an idea how to enact implimentation without usually causing strain on the individual and government. Liberals just assume entitlements are a given right to all.
Woonsocket was badly administered. It's been a Rhode Island joke for decades. The place where people park their cars "side by each". Will recievership help? From what I've seen at ground zero, it can't hurt at this point. Whatever party you are a member of...throwing money at a problem usually does little more than create new problems. To the comments above... I so agree that our governor should be replaced. Luckily, he is doing an excellent job of that on his own.
For the sake of clarity of honesty, I am usually introduced at social functions as "the Republican Witch". When challenged on how I could be a pagan and be supportive of conservatism, I usually respond that I err towards the side of "personal responsibility and accountability." When told that Republicans are evil, I smile..acknowledge that some Republicans are in fact doing no good for this country and then remind them that the KKK was the terrorist arm of the Democratic Party for over a century. Then the argument changes to "you should be a Libertarian then." My response is that Libertarians are for individual freedom. (Again, in honesty... my idea of personal freedom is to stay out of one's church, bedroom, or gun cabinet unless invited in by a consenting adult). Republicans(or the ones that used to care) were about personal responsibility.
Well, talk about digression off topic. Woonsocket needs to be put in recievership. The city needs to figure out a way to balance its services and taxes. This SHOULD fall on the illegal immigrant/undocumented workers. It won't. Service cuts will affect the elderly and the people who actually put money into the system (LEGALLY) for decades.
Finally, I have to admit that Ms. Maddow is probably my favorite political commentator. We do not agree on things. However, she is rather brilliant. When she goes after someone or supports someone... she has done her homework. She is not one of those wingnuts that just spew inflammatory comments for the sake of their own egos. On occasion, she has even supported the odd Republican. Why? Not because that Republican was doing a 'liberal' thing, but because they we're doing the 'right' thing.
When governments cannot finance their obligations, they either raise taxes, cut services, or find more efficient ways to deliver services. That's all I got from this story. And I do not think it is just the righties that take that approach. http://www.nj.com/news/index.ssf/2010/08/newark_mayor_bookers_plan_to_o.html
If we run the country like a bushiness that is one thing but the Republicans want to run the county like a take over bushiness where all assets are sold off and then the company is closed. Even if the company was making profits. What happens when the our country's assets are all sold and privatized? Do we then close the country? We will be worse off than those countries in Europe. We would no longer have a republic. We will have a country run by capitalist. The hierarchy will then be the 1% that has and the 99% that has not. no in between, no middle class and our way of life as we good decent middle class people know it is gone and over. And as we go so will our country go. We would no longer be the land of opportunities. We will be the land of the greedy.
Another "Panic in Detroit" Where's Che Guevara when we need him the most. What a man, oooohlala.
I am also a Rhode Islander, and the GOP has very little to do with the problems that Woonsocket are dealing with. The main problem with their finances is directly tied to their ever increasing school budget. The state of RI has been under Democratic control for 70+ years now (I am a registered Democrat, before you pull out the knives and insults about being a GOP troll), and it has overspent and over promised for years. This is the second town in RI to p[ossibly go into receivership, the first being Central Falls - which had similar problems, but was different in its tax base being only low income. Before everyone gets all hot under the collar and wants to have a Republican roast off, let me give you some insight into the insanity that is RI government.
School committees: In RI, there are school committees that oversee the spending of the local town school departments, set the budgets, and negotiate collective bargaining agreements with the local teachers unions. These school committees are not part of the town council, so they have no requirement to keep spending within the budget parameters. Due to the fact that they have no requirement to keep their spending at levels the town can afford, they tend to spend over budget and make one-sided deals with the unions in collective bargaining. A majority of the school committees in this state have union workers controlling them, or spouses of union workers on them - I am not bashing unions, I am simply pointing out that those who are controlling the spigot of money to the school a lot of the times have a financial motivation to agree with the unions.
The Carulo act: This is where it gets really crazy. There was a case in RI that was decided that set a precedent that school committees could sue the town they were in for more money if they didn't like the budget that was presented them by the mayor/manager and town council. In other words, the town tells the school committee that their budget is $1 million dollars, the school committee then says that they need $1.2 million dollars. The town counters that $1 million is the maximum they can afford. The school committee then sues the town for the difference in the money - not winning all of the time, but the process is just a scratch you head situation. http://www.ride.ri.gov/commissioner/Legal/VarianceRequests.aspx
Now why would the school committee want to sue their town instead of making some tough decisions on how to budget better? There is another law in RI that states that you can never cut a school committees budget. If the budget for this year is set at $1 million dollars, it can never go lower than $1 million from now until the end of time - regardless of any changes in town finances or student attendance levels (I forget what the word is for this right now).
RI is really hurting economically right now. We are still at 11% unemployment, and there are no jobs coming to this state any time soon. Tax revenues are very low, and we are a highly taxed state already (so no new businesses are lining up to relocate here). Woonsocket is not the only city where these kind of problems are coming to the surface, they are just the next that it is happening to. They will not be the last either.
There could be some "starve the beast" gamesmanship going on in Woonsocket from their Republican representatives, I am not a resident and not 100% familiar with their intra-political environment. What I do know is that the State of RI had to balance their budget, and did so by cutting the aid that they give to the cities and towns for education. That is the major factor in why these towns can no longer afford to pay their bills and live up to their obligations.
Woonsocket has overspent their budget 2 years in a row, and are in a deep financial hole. The argument can be made that a receiver is not a fair solution, but without the receiver, none of the contracts can be renegotiated (mainly because there is no motivation for them to be renegotiated without one). The city is out of money, and it is a matter of managing this economic crises through a receiver, or deciding to cut other services (such as closing senior centers, stopping road maintenance, turning off street lights, laying off city workers, etc). Woonsocket tried to get a supplemental tax bill passed to pay off the deficits (13% property tax increase!), but it failed. Here is a local news article about the town meeting where the tax increase was voted down so you can get some local perspective: http://www.woonsocketcall.com/node/4920
In summation, this does not fit neatly in the "Republican governments are trying to take over cities and towns" mantra that is being pushed by the left right now. It might be happening in Michigan, but it isn't happening in RI. Here, the damage has been done by years of miss-management and corruption - mainly from a one party rule, the RI Democratic party.
You didn't go back far enough in your history to trace the source or the beginning of all of RI's financial woes. Try going back about 10 or 11 years there you'll find your answer.
Thank you once again Rachel for keeping us informed about these things. I had not heard this before now. I am worried about our country more now than ever in my 58 years of life.
There be trolls here!
There was a time, when capitalism was new and shiny, that there was often no distinction between a factory or a mine and the town growing up around that factory or mine. In these towns, the capitalists owned all the housing and owned all the shops. People worked in the factory or mine for wages, which where then handed back to the company in the form of rent and store purchases. Very often wages were insufficient to cover the costs of living, and the workers got more into debt the longer they worked for the company.
I'm reminded (somewhat vaguely) of a scene in Germinal in which the shopkeeper (I think) was set upon by angry miners, killed and castrated, and then the mob paraded through the street with the shopkeeper's (or whoever) little feller being waved around like a banner. The point being that you can push people around for only so long before they push back, although Americans seem only too happy so far to be pushed around.
chemdmd: When W was pissing away our newly achieved surplus on his search for WMDs in Iraq, the neocons were answering (sic) their critics by saying that debt was good for the economy. Did you suddenly find your god, Austerity, after the '08 election? Sounds like it.