Thoughts on the EFM law

Bill Rogers has labeled local governments as “irresponsible” one too many times. Sorry Bill, no matter what the “spinmeisters” have told you, it’s not the locals fault. (Press and Argus, 11/09/12)

The EFM Law is a direct means to deflect responsibility for local unit financial distress from the source of the problem, the state legislature. Local governments did not create Proposal A or Headlee or all the other little nibbles at local revenue streams, like the pending repeal of the PPT without replacement revenues, which have virtually eliminated a local government’s ability to respond to cash flow shortfalls. Local citizens are now dependent upon Lansing to assure an adequate revenue stream to support their operations and Lansing refuses to accept the responsibility they assumed when they removed the ability of locals to support themselves.

Instead our legislature and governor are using the global financial collapse as an excuse to further consolidate the power of the purse at the state level. Seizing the fixed and liquid assets of a community, reneging on contracts made in good faith, and placing the future of employee pensions at risk is the means to their end. Public Act 4 is their authority.

The Department of Treasury, at the direction of the legislature, rates the financial viability of local units using measures that asses a static point in time. It doesn’t take a rocket science to determine that the financial markets are in trouble resulting in poor ratings for communities, ratings driven by the “irresponsible behaviors” of the financial community writ large, not the actions of local governments.

But, the EFM Law provides the cover necessary to protect those entities that loaned/invested local money from the disaster created by lack of appropriate regulation of risk. Their risk is minimized by liquidating local government assets and citizens futures just as those “to big to fail” financial firms have had their bad bets covered by the American Taxpayer.

The pattern is pretty clear, from the town hall to the classroom, assume all of the authority but none of the responsibility and when you screw up, blame the people at the bottom, those some politicians label as “irresponsible”, the 47%, or the “Takers”. You all know who you are, the ones that pay the bill.

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