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Book of Matthew: All good naysayers, speak up! Or forever hold your peace!

Michigan gives governor power to pull the plug on Michigan towns

Published: March 18, 2011
Section: Opinions

Ever since Governor Scott Walker of Wisconsin and his legislative allies passed a law banning public employee unions from engaging in collective bargaining, the state has been in an uproar. Thousands of protesters continue to gather outside the capitol building in Madison, and thousands more angry citizens are mounting a strong recall campaign to punish the most vulnerable Republican state legislators.

Though we should certainly follow events as they continue to unfold in Wisconsin, it is also important that we turn our attention to its neighbor, Michigan. While all eyes have been on Walker and his antics, Governor Rick Snyder has also passed an anti-union bill, but one whose effects are more far-reaching, and whose implications are more disturbing, than anything in Walker’s wildest dreams.

Snyder, like Walker before him, is taking advantage of a bad economic situation. Consider the sorry state of Michigan: It has suffered double-digit unemployment since the Great Recession began and its January average of 11.3 percent unemployed is almost two points higher than the national average. With fewer residents able to pay taxes, the state, as well as most of its cities and towns, is struggling to provide basic services with less money to do so.

To the casual observer, it would seem obvious that Michigan has a revenue problem that can only be solved by putting people back to work. But to Snyder, who must establish his conservative bona fides to keep his supporters happy, there can only be one answer: Those pesky municipalities are spending too much money, thanks to those peskier labor unions.

Snyder’s solution is to bring in new management. His bill, which passed both chambers of the Michigan legislature last week, gives the governor the power to appoint so-called “emergency managers” who will assume control over local governments and school districts facing financial troubles.

I’m not exaggerating when I say “assume control;” according to the bill, an emergency manager “[shall] act for and in the place and stead of the governing body and the office of chief administrative officer of the local government.” While an emergency manager is in control, members of the elected local government or school board may not exercise any powers of their offices without the manager’s consent—though they do have to pay his salary and any “necessary expenses.” Meanwhile, the manager assumes the power to fire officials, eliminate services, sell assets and terminate any existing collective bargaining agreement with local unions.

Even passing over the fact that the Contract Clause of the Constitution prevents state laws from “impairing the Obligation of Contracts,” there is a lot to worry about in this bill. Imagine living in a Michigan city where you have just elected a mayor and a council, only to be told that, due to some mysterious financial circumstances, your elected leaders will not be leading you at all. Instead, a new guy is going to run the place until your finances are deemed to be in order. He might not be from your city. He might work for, or even own, a large corporation. After all, the bill only stipulates that emergency managers be individuals with at least five years experience in “business, financial, or local or state budgetary matters.” He could be anything the governor decides and you won’t have a say.

That’s not local government.

Oh, and did I mention who gets to determine whether these municipalities are actually in financial trouble? That would be Snyder himself. The bill lists several different factors that may indicate problems (including the vaguely-worded “existence of other facts or circumstances that in the state treasurer’s sole discretion for a municipal government are indicative of municipal financial stress”). Only one must be applicable before the state financial authority can launch a preliminary investigation. Once the results have been compiled, the bill effectively leaves the final decision of whether to install an emergency manager in the hands of the governor.

This isn’t about financial stability; there are many other means by which a municipality can get its financial house in order. This is a power grab that could have come straight out of an amateur dystopian novel.

If you want further proof, just look at Snyder’s proposed budget. He plans to reduce Michigan’s flat income tax rate from 4.35 percent to 4.25 percent—which isn’t too bad, on it’s own—but also seeks to cut the Michigan Earned Income Tax Rate, a $600 tax deduction for children, and tax credits for donations to food banks and homeless shelters. He wants to tax pension income and senior dividends, regardless of economic status. At the same time, Snyder proposes to cut taxes for almost all businesses, offsetting any revenue gains the state would receive from the aforementioned increases. It’s completely lopsided.

This is not the budget of a governor who knows how to solve a financial problem. This is the budget of a governor who seeks only to feed the rich from the shrinking pantries of the masses. He must be held accountable.