LANSING (AP) — Gov. Rick Snyder ignored the protests of thousands of angry union members at the Capitol last week and signed legislation giving broad new powers, including the ability to terminate union contracts, to emergency financial managers appointed by the state of Michigan to run struggling cities and school districts.
Many Democrats and labor unions criticized the legislation as a state power grab that could set up virtual dictatorships and strip power from local elected officials.
The Republican governor said the legislation will let the state offer assistance earlier when local governments and school districts are in financial distress and give financial managers better tools to exert change.
“For too long in this state, we’ve avoided making the tough decisions,” Snyder said. “But waiting limits options and makes the solutions much more painful.”
The contentious new laws, which drew hundreds of protesters to the state Capitol last week and were criticized in another Capitol rally Wednesday, are the latest in a series of showdowns across the country pitting Republican state officials against union rights backers.
The most visible one came in Wisconsin, where Senate Democrats fled the state to block — albeit temporarily — a vote on legislation stripping collective bargaining rights for public workers.
While the Michigan plan wouldn’t go that far, many Democrats and labor unions are upset that an emergency manager could toss out union contracts to salvage a local entity’s finances, which opponents consider an assault on collective bargaining.
The current state law related to emergency financial managers is affecting about a half-dozen local communities and schools at this time.
Only Pontiac, Benton Harbor, Ecorse and the Detroit Public Schools have state-appointed emergency financial managers in place, and critics say the current law isn’t strong enough to do much good.
The new laws set up multiple triggers that could spark a state review of a local government or school’s finances.
The triggers would include creditors with undisputed claims, defaulting on bonds, ending the year in a deficit or a resolution of the state House or Senate requesting a preliminary review.
The state treasurer’s office says the bill would allow the state to get information from local governments and start preliminary reviews more quickly, and supporters say many cases could be resolved without the appointment of an emergency manager.
Ultimately, the governor would decide whether an emergency manager is appointed.
The manager then could modify or end union contracts, order elections to raise or extend property taxes or take a host of other actions.
A manager could recommend that local governments consolidate and, with the governor’s approval, could “disincorporate or dissolve” a municipal government.
Local elected officials would be stripped of significant powers, but supporters of the legislation say they could be removed from office only if they repeatedly refuse to comply with requests for information.
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