More protests are expected this week at the state Capitol as lawmakers continue to debate new rules for cities and school districts that run into trouble paying their bills.
The controversy is one of the first big showdowns between Republicans and Democrats this year over government reforms.
Unions and Democrats have pretty much given up on trying to stop the measures. They’ve turned their efforts to limiting its scope to protect bargaining rights, as well as cap emergency manager salaries, and require them to periodically meet with the public – so far without any luck.
Doug Withey is a Teamsters bargainer.
“Every community in the state, every governing body has an open meeting. Have the public involved with that. Nope. Not reasonable. Vote it down.”
But Republicans like Senate Majority Leader Randy Richardville say an emergency takeover would be the last option after all else has failed.
“The intent of the legislation is to get into an emergency situation and fix it before it becomes a catastrophe.”
Governor Rick Snyder says his goal is not more state takeovers.
“Anytime you have an emergency manager come in, that’s a failure point. The best answer is to put in a better early-warning system – to figure out how to work with communities before they reach the point of needing a financial manager because a lot of things can be done in those earlier stages to avoid the issue and that’s the best answer.”
Right now, Richardville, Governor Snyder and Republicans have the numbers they need in the Legislature to prevail.
A teachers’ union leader says a proposal in the Legislature to give emergency financial managers sweeping control over school districts is a bad deal for educators.
The Michigan Senate approved the bills this week that would dissolve union contracts and eliminate collective bargaining rights at the local level if an emergency manager were put in control of a school district, city or township.
David Hecker is vice president of the Michigan division of the American Teachers Federation union. He says many financial problems can be better addressed through collective bargaining.
Hecker appeared on public television’s “Off The Record.”
“It either eliminates or severely undercuts collective bargaining – so it hurts the middle class – and it also hurts education. Because, you know, the problem with the EFM bill is if it’s an issue – and it’s an issue, there are districts and there are cities who are in financial difficulties – but you just don’t throw out a solution. You figure out what the problem is, and then you craft a solution.”
“We rather Governor Snyder work with us, we all work with the Legislature, and we work in support of communities, we work in support of the middle class, we work in support of our students. We think the EFM bill works against communities, works against the middle class, and is not good for our students. So Governor Snyder has a choice. We rather work together than become Wisconsin.”
“If people think we need this hammer to come to the table to say ‘yeah, health care costs are increasing, we have to address it. The school district’s in debt, we have to address it,’ we already do that at the table. You know, what do you say to a secretary of Detroit Public Schools who makes 22-thousand dollars a year and just took a three-percent pay cut?”
The House is expected to vote on the emergency financial manager bills next week. Governor Rick Snyder called for the reforms in his State of the State address.
As protests continue in Madison over a controversial bill removing collecting bargaining rights from some public unions, attention is drifting to Michigan.
Governor Snyder has responded to reports and protests by saying that he does not want to follow Wisconsin Governor Scott Walker's example, reiterating in an interview with WXYZ that he is eager to solve problems--including the specifics on $180 million dollars worth of concessions from state employees--through the collective bargaining process, and that he "was hired to solve Michigan's issues."
But whether Governor Snyder wants attention from national media or not, it is happening, including a ten-minute report on last night's Rachel Maddow Show.
But what does the law actually say? What is an Emergency Financial Manager? How are they appointed?
And if the title wasn't a clue, the explanation is a little long.
From the FAQ:
What triggers the Act?
Among the conditions specified in the Act are the failure by a unit of local government to pay creditors, the failure to make timely pension contributions, and payless paydays. In addition, certain officials, or residents, of a unit of local government may request a preliminary review under the Act, as may either the State Senate or House of Representatives.
What happens when the Act is triggered?
The State Treasurer conducts a preliminary review of the financial condition of the unit of local government. Once that review is concluded, the State Treasurer reports the result to the Governor. If a serious financial problem is found to exist in the unit of local government, the Governor then appoints a financial review team to conduct a more detailed review of the financial condition of the unit of local government.
What is the purpose of a Financial Review Team?
...[A] Financial Review Team...conduct[s] a more detailed review of the financial condition of the unit of local government. A Financial Review Team generally has 60 days (generally 30 days in the case of school districts) to complete its work and file its report. A Financial Review Team report must reach one of the following three conclusions:
-- A serious financial problem does not exist in the unit of local government, or
-- A serious financial problem exists in the unit of local government, but a Consent Agreement containing a plan to resolve the problem has been adopted, or
-- A local government financial emergency exists because no satisfactory plan exists to resolve the serious financial problem.
If the third conclusion is reached, or if a unit of local government signs, but subsequently violates a Consent Agreement, then a financial emergency is determined to exist in the unit of local government and an Emergency Financial Manager is appointed.
Who appoints Emergency Financial Managers?
For units of local government other than school districts, Emergency Financial Managers are appointed by, and serve at the pleasure of, the Local Emergency Financial Assistance Loan Board, which consists of the State Treasurer, the Director of the Department of Management and Budget, and the Director of the Department of Energy, Labor and Economic Growth. Emergency Financial Managers for school districts are appointed by the Governor, subject to the advice and consent of the State Senate
New Powers for EMFs
But a bill passed by the Michigan Senate this week expands the Emergency Financial Managers' powers to include ending union-approved contracts. Holland radio station WHTC reports:
After days of debate and protests, the State Senate passes a bill to give more power to emergency financial managers appointed to cities or school districts. The 26-to-12 vote, which followed party lines, will allow emergency managers to cancel workers union contracts.
Democrats have said passing the bill would undermine collective bargaining in the affected communities or schools, while Republicans contend the legislation would help target municipalities or districts before their financial problems reach critical levels.
Six localities or school districts are currently affected by the law. From the Chicago Tribune:
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.
The bill has passed the House and the Senate and is on its way back to the House, where approval is required for some minor changes.
Nobody in Lansing was neutral yesterday when the Michigan senate completed passage of new, tougher Emergency Financial Manager legislation on a straight, party line vote.
State Senator Phil Pavlov said this is needed to maintain “vital services, such as public safety and education,” when a city or a school district is in desperate financial straits.
This reform, he said, is necessary to allow steps to be taken “to protect public interests and the public’s money and strengthen local control and accountability.” His fellow Republicans all agreed.
But if you talked to any of the Democrats, they sounded like this was the equivalent of Mussolini seizing power. “An unfair and unjustified power grab,“ Senate Minority Leader Gretchen Whitmer called it. One of her colleagues said it went way too far, “and was going to damage our communities and our schools.”
Well, you could say that it is nice to see that our time-honored tradition of bitter partisan divisions is alive and well, but I think the opposite. We’ve had four sterile years of that in Lansing. I think we’d all be better off if this could have been a bipartisan bill.
Legislation that would allow emergency financial managers to throw out union contracts and overrule elected officials in financially distressed municipalities and school districts was approved in the Senate today.
The measure passed 26-12 along party lines in the Republican-controlled chamber. Similar bills passed in the House in late February. The chambers must now agree on a final version to send to Gov. Rick Snyder for his signature. More than 1,000 union members demonstrated opposition to the bills Tuesday, chanting loudly outside the chamber doors as senators worked through details of the legislation.
More than a thousand union members crowded into the state Capitol today.
They were protesting a proposal to give emergency financial managers more control over cities, townships, or school districts.
The labor movement is upset the bills would eliminate collective bargaining rights and dissolve union contracts.
The gavel reverberated in the Senate chamber as protesters in the gallery cheered, breaking the rules that prohibit demonstration during session.
They applauded Senate Majority Democratic Leader Gretchen Whitmer as she condemned the proposal for not having a salary cap.
Whitmer says it does not make sense “to vote for a bill that allows an emergency financial manager to make more than our governor.”
Outside of the chamber, hundreds of workers packed the three open floors of surrounding the Capitol rotunda – a scene similar to the pictures of protestors in Madison-Wisconsin.
They screamed for the recall of Republican lawmakers who support the emergency-manager bills.
But republican lawmakers appeared unfazed by the raucous crowd, and they plan to move forward with the proposal they say will keep many cities and school districts out of financial ruin.
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