Detroit emergency manager poised to make deep cuts, amid protests

Mike Tobin reports from Detroit


As Kevin Orr begins his stint as the first-ever emergency financial manager for Detroit, he's already facing a backlash -- from civil rights leaders like Al Sharpton and Jesse Jackson who have descended on Detroit to oppose his installation. 

But this isn't the first time a Michigan city has been thrown into this situation because of poor financial decisions. And their experience can provide a guide for what's about to happen in Detroit -- most likely, a contentious series of cutbacks that will be challenged along the way. 

In Pontiac, Mich., the city has been under the control of an emergency manager since 2009. But Louis Schimmel, the emergency manager, offers little sympathy for council members who gripe about their lack of clout when an emergency manager moves in. 

"Of course they have themselves to blame and they have themselves to blame because of mismanagement," said Schimmel. 

Pontiac's Mayor Leon Jukowski told Fox News that right now, he has "absolutely" no authority because of the city's situation. 

Orr is now assuming the kinds of duties Schimmel has faced. He will have sway over the budget, even the salaries, of the council members -- and they don't get a vote. 

"In my business, you're sort of the undertaker who walks up to the front door. I'm rarely welcomed with open arms," Orr said in an impromptu news conference as he entered city hall. 

Civil rights leaders like Sharpton and Jackson have now descended on Detroit with plans for more demonstrations. Jackson claims half of all black Michiganders have been disenfranchised. They voted in a fair election, but the government representatives they chose have been muscled aside by a state appointee. 

"The right to vote is at stake here. Beyond the vision of economic reconstruction, the very right and the power to vote, the right for a vote to count," Jackson said. 

The emergency manager is not needed, however, without an emergency. And Detroit has a colossal one. The budget deficit is $327 million. The long-term debt is $14 billion. The staggering debt for one municipality is more than enough to purchase the aircraft carrier USS Theodore Roosevelt twice. 

The pattern for emergency managers thus far is that they slash budgets, unload assets and outsource every service possible. Pontiac now has contractors filling potholes, county and state snowplows clearing the roads, and the county sheriff handling the police work. That's because the emergency manager did away with the police budget. 

Municipal employees in Detroit don't need a crystal ball to see into their futures. They are on the chopping blocks, and their unions know it. 

Edward McNeil with AFSCME said he has proposed everything from streamlining the budget to collecting old property taxes to avoid getting to this point. Now, he and his union are bringing a lawsuit intended to lock up Orr's job-slashing power. 

"This whole thing was a sham for the state to come in and take over assets of the city of Detroit ... and to break the unions," said McNeil.

Michael Tobin joined FOX News Channel (FNC) in 2001 and currently serves as a Chicago-based correspondent.