Michigan Voters to Decide 'Dictator' Law's Fate

Labor activists say a law giving the state oversight over local government is undemocratic. But fiscal conservatives say it's the only way to preserve financial stability.
by | October 29, 2012

Nov. 7, 2012 7:41 a.m. Update: With 94 percent of the precincts reporting, 52 percent of Michiganders voted to repeal Public Act 4.

For full election coverage and analysis, go to Governing's 2012 Election Center.

Michigan voters will soon decide whether to scrap a controversial law approved last year that gives the state almost unilateral authority to take control of struggling cities and school districts.

That law, known as Public Act 4, allows state-appointed "emergency managers” to assume power held by mayors and other locally elected officials, pass ordinances, and make changes to labor contracts in struggling localities.

Critics who've dubbed PA 4 the "dictator law" say it’s a subversion of democracy, but supporters say it’s the only way the state can prevent some localities from becoming insolvent and declaring bankruptcy -- which would have statewide implications.

The debate over PA 4, and its effect on Pontiac, Mich., was the subject of a Governing cover story earlier this year.

Currently, three districts and four cities are operating under the state oversight. Three other cities signed agreements that give the state broad oversight but fall short of turning over total control to a state appointee.

Opposition to the law is primarily organized Stand Up For Democracy, a group backed by labor organizations who say PA 4 has been used to lay off public workers and reduce their pay and benefits while outsourcing work to private-contractors.

“We believe that (the law) eliminates jobs within our community that are union jobs – fair wage jobs – with good benefits,” says Herb Sanders, an attorney with the Stand up for Democracy. “There’s a lot of money at stake. The opportunity for contracts to be had by a lot of big businesses – that’s what the fight is about.”

Flint, Mich. Mayor Dayne Walling, whose authority has largely been displaced as a result of the state’s emergency intervention, says the law also undermines the ideals of democracy. He says the state should consider alternative approaches to local financial challenges. “There has to be a long-term solution that matches the economic realities but also the public expectations of democratic participation,” Walling says.

Opponents of the law gathered enough signatures to place the law on the ballot this November, but they almost failed on a technicality. Challengers to their petition said it technicality used the wrong sized font, which should have stopped the vote. An appeals court sided with petitioners.

Meanwhile, it’s unclear what, exactly, will happen if voters do put an end to PA. When petitioners got enough signatures to force the vote, the law was temporary suspended. State officials say that means Public Act 72 -- a less-expansive emergency manager law that still gives the state great authority – was resurrected.

But PA 4 opponents say that shouldn’t have happened. They’re fighting to ensure that if they defeat the current the law on Election Day, the old law won't continue in its place.

A pending lawsuit has already challenged the validity of PA 72's resurrection, says John Philo, legal director of the Sugar Law Center for Economic & Social Justice. It won’t be heard until after the election.

Another pending lawsuit questions the state constitutionality of PA 4. If the law’s opponents win on Election Day, that argument would be moot. But if they fail at the ballot box, it could give them another avenue to defeat it.

Sanders, of Stand Up Foe Democracy, say PA 4 opponents haven’t filed a federal suit, but that will likely happen if they don't win on Election Day.

Meanwhile, supporters of the law are fighting to ensure it stays on the books. Among them is the Michigan Chamber of Commerce. The group argues that public employee unions are seeking to repeal the law without taxpayers' best interests at heart.

Betty McNerney, a spokeswoman for the Michigan Chamber of Commerce, says her organization is urging voters to support the existing law. “Our members pay a substantial amount in tax revenue at the school level, local level, and state level," she says. "We've always had an inherent interest in the other side of the equation… how that money is being spent."

She says PA 72 wasn’t strong enough to reform local governments, and the new law has helped localities get back on track.

The conservative Mackinac Center for Public Policy -- which advocated for many of provisions in PA 4 -- is also advocating for citizens to preserve the law. Experts there say it's critical to preserve emergency managers' authority to amend labor contracts, since personnel costs typically represent local governments' greatest expense.

Both of Detroit's major daily newspapers support preserving the law. "Is it undemocratic? Sure," the Detroit Free-Press wrote. "But the alternatives are much, much worse."

Michigan Emergency Managers and Consent Agreements

Red markers shown below represent governments and agencies under emergency management. Yellow markers signify consent agreements. Click the icons for additional information.

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