Unions say it threatens collective bargaining
This week, the governor of Michigan signed a bill into law giving himself the power — through a state-appointed manager — to declare cities insolvent and hand them over to a handpicked emergency manager vested with the power to cancel collective bargaining agreements, fire elected officials, call millage elections and dissolve a municipal government.
Thousands of union protesters rallied inside and outside the state capitol as Gov. Rick Snyder, a Republican, signed the bill late Wednesday. And when the governor appeared Thursday at an auto plant ceremony in Wayne, Mich., celebrating the launch of the 2012 Ford Focus, he was booed by unionized workers (see video below).
Synder and his supporters claim that emergency management will only be needed in rare emergencies. However, Snyder’s 2012 budget all but guarantees an epidemic of municipal financial crises. The budget cuts $92 million in revenue sharing with cities and towns.
Revenue sharing is a longstanding policy where the state helps local governments pay for for essential services like police and fire protection. Local governments will now have to compete for the remaining $200 million in revenue sharing under criteria that are as yet unclear.
Michigan already had legislation that allowed the governor to declare a fiscal emergency. However, under the old law, the Local Emergency Financial Assistance and Loan Board chose the manager. Under the new law, the emergency manager is chosen by the governor and serves at his pleasure.
The new law gives the emergency manager the power to modify or terminate collective bargaining agreements between governments and public employees.
However, the U.S. Constitution limits the power of a state to unilaterally dissolve a contract between a state and a private party.
According to an analysis of Michigan House Fiscal Agency, the Michigan Chamber of Commerce and the (Koch-foundation-supported) Mackinac Center for Public Policy urged the state to give greater power to emergency managers.
Snyder’s policies are setting up a conflict of interest. The more he starves cities and towns for funding, the more likely they are to end up in financial emergencies. The more cities fall into financial crisis, the greater the governor’s power to impose his anti-union agenda.