Michigan Law Would Overturn Local Democracy, Shred Contracts
Monday 14 March 2011
On March 8 a thousand Michiganders—including firefighters, teachers, office workers, health care workers, auto workers and steelworkers—rallied at the state Capitol in Lansing, filling all three floors of the rotunda and demanding “kill the bill.”
We were opposing legislation that would give astounding unchecked power to emergency managers appointed by the governor when he or she decides local municipalities or school districts are in financial trouble.
These powers include firing elected officials, tearing up union contracts, outsourcing, slashing services, and selling off public assets without competitive bidding. Newly installed Governor Rick Snyder, a Republican, demanded the legislation in January.
It’s his silver bullet to slay the twin enemies, government and unions. As one Republican state senator said, managers should be sent to communities or school districts that need “financial martial law.”
Tuesday’s action was the third union- or community-called demonstration at the Capitol within two weeks, but on March 9 the Michigan Senate passed the bill. It will be reconciled with the House version and voted up by a legislature with a solid Republican majority on March 16, when the Michigan AFL-CIO is calling for a noon demonstration.
Since 1990 the governor has had the ability to appoint emergency managers. The premise behind the initial legislation was that local budget problems were the result of poor management. That is, better management would yield fiscal stability and bankruptcy could be avoided. The resources at hand were considered sufficient.
The cities of Benton Harbor, Pontiac, and Ecorse are under such managers, as are the Detroit public schools. Each city is majority African American.
No More Harassment
According to the March 6 Detroit News, the need for new legislation that would grant managers more powers grew directly out of the dispute between Robert Bobb, the emergency financial manager appointed two years ago to handle Detroit public schools finances, and the elected school board. The paper complains that the board “has continuously harassed Bobb with lawsuits challenging his authority, and a Wayne Circuit Court judge has sided with the board.”
In short, when an elected body documents that the manager has overstepped his authority and wins in court, the News says that’s outrageous. The editors are pleased that the new legislation “will free the manager from the meddling of the elected boards, councils and mayors” and if unions “work with their local governments to put rational and affordable labor contracts in place,” they will not face having their contracts torn up.
The proposal was promoted by the Mackinac Center for Public Policy, a right-wing think tank funded by arch-conservative billionaire Charles G. Koch. A 2005 article on the center’s website outlined goals, including exempting managers from being sued, broadening the manager’s functions, and voiding the rule that provided for mandatory continuation of an expired union contract until a new one was in place and that established binding arbitration when negotiations failed.
These concepts are in the new bill, which added a radioactive element to the already toxic mix—it gives the manager the ability “modify or terminate” existing collective bargaining agreements at his “sole discretion and judgment.”
Under the new law, public workers in targeted towns will be expected to take what they’re offered with a smile. Services, including schools, will deteriorate, proving once again that if you want a service, best to purchase it.
Even without the expanded powers, Bobb has fired security guards, closed dozens of Detroit schools, and spent thousands of dollars hiring incompetent consultants. He has threatened to balloon class sizes as high as 60 kids.
The district is now in deeper financial trouble than when Bobb arrived.
Dozens Face Takeover?
Michigan has had high unemployment for a decade, 14.6 percent in July 2009 and currently 10.7 percent, the first time in two years it has dipped below 11 percent. Detroit, Flint, and Pontiac have even higher unemployment and foreclosure rates.
Given that property taxes are down and Snyder’s proposed state budget cuts will slash even more deeply into local balance sheets, dozens of municipalities and districts may face takeovers.
Michigan faces a $1.4 billion deficit and Snyder’s projected budget grants businesses $1.8 billion in tax breaks. He would tax corporations just 6 percent while taxing workers’ pensions and eliminating the state’s Earned Income Tax Credit for low-income workers.
Will forcing cuts in wages and benefits on public workers solve the state’s cascading fiscal problems? Hardly; it will simply erode one of the few good jobs that stabilize Michigan’s struggling towns.
Dianne Feeley is a retired auto worker in Detroit.
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