Are Michigan's Emergency Financial Managers Overpaid?

The salaries of Michigan’s emergency financial managers are being questioned across the state. But how does EM compensation compare to other state employees' salaries?

The headline in the Flint Journal reads: “State-appointed emergency managers make six figures at local community’s expense.”

The annual pay for the four emergency managers in charge of cities follows: Flint ($170,000), Ecorse ($132,000), Benton Harbor ($132,000) and Pontiac ($150,000). Detroit Public Schools’ Roy Roberts was given a $250,000 salary but took a 10-percent pay cut.

The article quoted State Rep. Woodrow Stanley, D-Flint, as saying the salaries appear to be “exorbitant pay.”

Yet one public policy expert says many are forgetting why an emergency financial manager had to be appointed in the first place.

“If these cities had not fouled their own nest, it would not be necessary to compensate emergency financial managers at any level,” said Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy.

LaFaive believes the criticism of the emergency financial manager pay is probably more about the controversial law than the salary.

There are many municipal employees, not as high ranking, who make much more than the emergency financial managers.

Jim Wilson is the general manager of the Blue Water Area Transit – the bus system in Port Huron. He made $137,797 in 2011 and oversees 84 employees.

Peter Varga, CEO of The Rapid – Grand Rapids' transit company – made $193,010 in 2010. The Rapid has 308 employees.

Ann Arbor Transportation Authority CEO Michael Ford made $183,895 in 2010. The AATA has 171 employees.

In 2010, then-president and CEO of the MEDC Greg Main had the top salary, at $200,000. Debra Dansby, then the MEDC’s chief operating officer, had the second-highest salary at $150,000.

Michael Finney was hired in 2011 as the new CEO of the MEDC and has a salary of $250,000.

Detroit Zoological Society Director Ron Kagan made $231,461 in 2009, the latest year salary information was available. The Detroit Zoo had 384 employees in 2009.

Robert Bobb, former Detroit public school emergency financial manager, made $280,000 in 2010. However, there were 10 other superintendents that made $200,000 or more in 2010.

LaFaive said if the critics of emergency financial managers’ compensation believe the pay is out of line with what the private market would pay for a similar position, then that standard should apply to all municipal employees.