We have yet to realize the worst effects of Michigan Governor Rick Snyder’s union-bashing, democracy slashing power grab for Emergency Financial Managers. This of course refers to the far-reaching “local government and school district fiscal accountability act,” Michigan House Bill 4214 of 2011 unified with Michigan Senate Bill 513 of 2011.

Writing for Fox News in Detroit, Charlie Duff (“no liberal by any stretch of the imagination, but also no conservative”) wrote:

In Michigan, the emergency manager will have total power of the purse: with absolute authority the emergency manager will be able to sell assets like the water department, undo union contracts, abrogate collective bargaining agreements without discussion including those of police and fire. More worrisome still, the emergency manager will be able to dissolve local governments.

You needn’t have progressive DNA to find the bill horrifying. Still, the worst may be what was nearly mistakenly (or truly intentionally) left out.

The bill is foreboding, as summarized even by the most thoughtless thinktank in Michigan, the mindlessly conservative Mackinac Center for Public Policy (whose funders include the Charles G. Koch Charitable Foundation), the bill would “greatly enhance the powers” of Emergency Financial Managers (EFMs), giving them unprecedented “power to cancel or amend existing government or school employee union collective bargaining agreements and other contracts. School EFMs would have authority over academic matters, and could close schools.”

Oddly, the Mackinac Center, which normally would raise a rabid ruckus over public debt for goals as frivolous as education — let alone any tax on any sort of any thing — seems unfazed by their final admission: “An EFM could also order new borrowing, or put a property tax millage increase on the ballot.”

The basic premise of the bill — the rapacious politics driving it, dictatorial desires behind it, racial and class undertones of its genesis, and outrageous brutality it embodies against any public will — is easy enough to ridicule. However, I was astonished to read the long thread of amendments the Michigan Senate felt necessary to consider, let alone reject or approve.

This is not an analysis of the bill. I’m simply echoing how woefully, dreadfully, horribly the bill must have been lacking when introduced by Senator Phillip (I am not making this up) Pavlov. Presumably Phillip P would have drooled over his proposal only with Rick Snyder’s sly wink firmly in mind.

This describes what Democratic elected officials who opposed the bill tried to add and what Republican elected officials who supported the bill needed to add.

This describes what was not considered, caught, or corrected by the people — including Governor Rick Snyder and his staff — who drafted the bill. It reveals how little thought went into creating the monstrosity that Governor Snyder will soon sign into law… what Senator Jack Brandenberg (Rep) described as “financial martial law.

For clarity, here are the sweetly euphemistic goals Snyder and his GOP cohort sought to achieve, from the bill’s introduction:

A bill to safeguard and assure the fiscal accountability of units of local government, including school districts; to preserve the capacity of units of local government to provide or cause to be provided necessary services essential to the public health, safety, and welfare; to provide for review, management, planning, and control of the financial operation of units of local government and the provision of services by units of local government, including school districts; to provide criteria to be used in determining the financial condition of units of local government, including school districts; to permit a declaration of the existence of a local government financial emergency and to prescribe the powers and duties of the governor, other state departments, boards, agencies, officials, and employees, and officials and employees of units of local government, including school districts; to provide for placing units of local government, including school districts, into receivership; to provide for a review and appeal process; to provide for the appointment and to prescribe the powers and duties of an emergency manager; to require the development of financial and operational plans to regulate expenditures, investments, and the provision of services by units of local government, including school districts, in a state of financial stress or financial emergency; to provide for the modification or termination of contracts under certain circumstances; to set forth the conditions for termination of a local government financial emergency; and to repeal acts and parts of acts.

Continuing then from the Michigan Senate Journal for 09 March 2011.

Please note that there are barriers to understanding what these amendments amend. The page numbers cited during the Senate session match the page numbers of none of the publicly available copies of the bill. Not the 44-page House introduced bill, nor the 44-page House enrolled bill as passed by the house.

The page numbers included in Senate motions do match the 47-page Senate approved bill, clearly described “As Passed by the Senate is the bill, as received from the House, that includes any adopted Senate amendments.” In other words, it appears that while the amendments were being made, the final version was already available as reference.

This truly is troubling. The first proposed change, to “Amend page 47, following line 6, by inserting: Sec. 32″ can not be made to a 44-page House-enrolled draft. When reading the Senate Journal, one must refer to the “Senate Passed” bill — which we are left to imagine did not exist prior to legislative action. [sigh]

• In the first proposed amendment, John Gleason (Dem) proposed to capture the “the intent of the legislature” that under the act a local unit “will not have its bond rating downgraded as a result of an action intended to safeguard its continued financial viability.”

The amendment was defeated, 26-12, along strict party lines. Not one Republican among twenty-six was willing to admit even “intent” of preserving the bond rating of a unit of government in Michigan.

• Steven Beida (Dem) proposed what we might all expect of any public official, that: “An emergency manager and his or her employees, agents, and contractors shall avoid a substantial conflict of interest.” Beida’s motion continued:

An emergency manager shall not do any of the following:

(a) Use his or her position to obtain private gain or advantage for himself or herself, a relative, or any entity in which he or she has a present or potential financial interest.

(b) Disclose or use confidential information that is not generally available to the public for his or her own financial benefit or for another person’s financial benefit.

(c) Participate in a transaction that he or she may substantially influence if he or she knew or should have known that a relative, friend, or associate has a substantial financial interest in the transaction.

(d) Use public funds, time, or equipment for his or her own private gain.

(e) Undertake any activity that is a conflict of interest, or would appear to a reasonable person to be a conflict of interest, between his or her private interests and the public duties required under this act.

Finally, Bieda proposed a remedy for such violations: “If the state treasurer determines that a violation of subsection (2)(c) has occurred, the state treasurer may cancel the transaction if the public interest would be served and if an innocent third party would not be adversely affected.”

The amendment was defeated, 25-13. Props to Tory Rocca (Rep) for opposing conflicts of interest, thereby distancing himself from the GOP party line.

• Virgil Smith (Dem) proposed that when an EFM exerts authority to “Negotiate and sign a consent agreement with the chief administrative office of the local government,” it should occur “in consultation with the governing body of the local government.” In other words, even though the agreement would still only require approval by one office — Township Supervisor, Village President, City Mayor, or equivalent Administrator — there would at least be consultation with the elected officials.

The amendment was defeated, 24-14. Inexplicably, both Patrick Colbeck (Rep) and Joe Hune (Rep) broke party ranks to agree that elected officials should at least be consulted in some form before signing away everything. Thanks, guys. Seriously.

• Virgil Smith (Dem) proposed that instead of serving “at the pleasure of the Governor,” that “The emergency manager shall serve for a term as set forth in a contract approved by the state treasurer.” Further, that “the emergency manager shall not negotiate, renegotiate, approve, or enter into any contract on behalf of the local government with a term that is longer than the emergency manager’s contracted term.” In other words, the EMF would be subject to a contract, reviewed by the State Treasurer, and be limited to that term.

The amendment was defeated, 25-13. Again, Joe Hune deserves a bit of honor for opposing the party apparatus in vain hopes of providing the EMF some rational limits.

• Tupac Hunter (Dem) proposed that any EMF “shall not have been either an elected or appointed official or employee” of a local unit during the preceding five years, or of a school district in the preceding two years.

The amendment was defeated, 26-12, straight party lines. How is that a party issue?

• Tupac Hunter (Dem) tried again, to limit only the local unit preceding years of service, leaving schools out of it.

The amendment was defeated, 27-11. Bieda crossed over.

• Tupac Hunter (Dem) moved that “The annual salary of the emergency manager shall not exceed the annual salary of the governor of this state.” (And, although corporations may wish for the gig, page 23 of the Senate bill states that “The emergency manager shall be an individual.”)

The amendment was defeated, 19-19, with Lieutenant Governor Brian Calley breaking the tie, thus ruining what might have been a revealing negotiation about what the Governor is worth. The seven Republicans who (thankfully) realized the EMF should not be paid more than the Governor, currently about $177,000 annually included: Mike Green, Tom Casperson, Bruce Caswell, Geoff Hansen, Mike Nofs, Patrick Colbeck, and Tory Rocca.

But, just to be clear: they lost. There is no apparent limit to how much the EMF can demand in salary, or how much the Governor can give them, or for how many years, at the Governor’s pleasure. Half of your elected officials — all Republicans — felt there was no need for any limit.

• Tupac Hunter (Dem) and Bert Johnson (Dem) proposed “an education emergency resolution board within the department of education,” which would oversee EFMs for school districts.

The amendment was defeated, 26-12 on brittle party lines. Republicans wouldn’t want a body comprised of informed or elected officials like the State Superintendent of Education, Secretary of State, and Director of the Department of Technology, Management, and Budget — with guidance from the State Attorney General and President of a local school board — having any say in the matter.

• Morris Hood III (Dem) proposed — rather than requiring the financially strapped local unit to pay all “compensation and reimbursement for actual and necessary expenses” — that the State of Michigan be required to pay the cost of the EMF it unilaterally imposes on the local unit.

The amendment was defeated, 26-12, along strict party lines. The GOP — after making a stink over every “unfunded mandate” (i.e., “law”) passed in the last twenty years — is now happy forcing an EMF down local throats, for any unbounded price, set unilaterally by the Governor, and making locals pay every cent for the privilege.

• Rebekah Warren moved that “At least once a month, the emergency manager shall hold a public meeting in the local government… to report on any actions taken… [and] shall allow for a period of public comment.”

Motion defeated, 23-15. Three Republicans bucked their bosses, and admitted the EMF should at least tell us what they’re doing, and let the public respond. Thanks to Mike Kowall, Patrick Colbeck, Tory Rocca for showing a little class and respect for basic ethics.

• Rebekah Warren suggested that for a school district (in addition to marginal job requirements like “five years’ experience and demonstrable expertise in business, financial, or local or state budgetary matters”) an EMF “shall have a background in education or teaching.”

The motion was defeated 24-14. Only two Republicans — Mike Nofs and Bruce Caswell — had the sense to think the head of school district should know something about education.

• Rebekah Warren tried to preserve negotiated pensions, by clarifying that the act “does not authorize the impairment of vested retirement benefits.”

Motion was defeated 24-14, with only Republicans Mike Nofs and Tory Rocca thinking that fully vested retirement benefits might be worth preserving.

• Rebekah Warren sought to eliminate the insane provision asserting that the EMF “shall assume and exercise the authority and fiduciary responsibilities of the local pension board, including… setting and approval of all actuarial assumptions.”

Defeated, along party lines, 26-12. Can it be that every Republican Senator in Michigan is ignorant of what “actuarial assumptions” are?

Please consult with a professional. I can personally recommend United Actuarial Services. Ask for Andy Smith, UAS President. His undergraduate degree was from Kalamazoo College, where his father was a Professor of Mathematics. Ask Andy, “Should we let appointed managers who don’t report to anyone or have any training in the field set and approve their own “actuarial assumptions” for pension plans?” Please?

This next reality is absolutely stunning. I genuinely hope that I have completely misunderstood everything about this provision of the bill.

• Rebekah Warren proposed an amendment to strike “all of subdivision (dd)” on page 34. Let me start by saying: the amendment was defeated 26-12; no surprise there. By so doing REPUBLICANS CONSCIOUSLY, INTENTIONALLY, UNILATERALLY GIVE ANY EMERGENCY FINANCIAL MANAGER POWER TO:

“Exercise solely, for and on behalf of the local government, all other authority and responsibilities of the chief administrative officer and governing body concerning the adoption, amendment, and enforcement of ordinances or resolutions of the local government as provided in the following acts:

(i) The home rule city act, 1909 PA 279, MCL 117.1 to 117.38.

(ii) The fourth class city act, 1895 PA 215, MCL 81.1 to 113.20.

(iii) The charter township act, 1947 PA 359, MCL 42.1 to 42.34.

(iv) 1851 PA 156, MCL 46.1 to 46.32.

(v) 1966 PA 293, MCL 45.501 to 45.521.

(vi) The general law village act, 1895 PA 3, MCL 61.1 to 74.25.

(vii) The home rule village act, 1909 PA 278, MCL 78.1 to 78.28.

You may not recognize those statutes, but after years of working with, and on serving on behalf of, local units of government in Michigan, I can summarize it. This grants all of the most politically, financially, and philosophically potent — and most easily abused — powers your local government has. Everything. Township, Village, City, and County.

If that’s true, an EMF can rezone land. They can rezone your land to whatever suits them, or rezone any other land to whatever a golfing buddy of theirs asks. They can allow your neighbor to kennel twenty dogs in their apartment, or prohibit you from having even one dog on eighty acres. They can permit expansion of a strip club or construction of a Walmart in the middle of town — or they can prohibit you from painting your shed, even if no one can see it from the road. The EMF can decide anything about how and when land develops, and how and when it is used.

I Am Not A Lawyer — and proud of it — but I’d predict that an EMF would be able to condemn land, too, for anything they personally consider a public purpose. Wow. Where’s the Tea Party when you need them?

Honestly, if I had realized this was in the bill, I’d have been in Lansing to try to stop it. The very notion of this makes me ill. But, I’ll continue. It’s that serious.

• Hoon-Young Hopgood (Dem) recommended replacing SB-153 with SB-5. I must assume that’s a typo, or a joke. SB-5 would allow caterers to bring and serve liquor at private events where they also serve food, instead of requiring the host to purchase the liquor independently. Defeated 26-12 — which somehow flies in the face of all the GOP stands for.

• Bert Johnson (Dem) proposed that once a contract exists, the EMF “shall not accept compensation from any other source for serving as an emergency financial manager.” (Perhaps this is how corporations will get a piece of the action: see an employee appointed as an individual, then pay a second private salary to preserve control.)

Amendment defeated 21 – 17. This time, five Republicans — Mike Kowall, Tom Casperson, Mike Nofs, Bruce Caswell, and Tory Rocca– thought maybe only one master at a time might be a good idea.

• Glenn Anderson (Dem) proposed that any EMF be required to report their name and address, along with names of immediate family members; employers of the EMF during the previous calendar year, along with sources and amounts of compensation for that year; and other large assets, liabilities, and benefit agreements held by the EMF.

Defeated 26-12. Republicans don’t want the public to know who is running our business, or who is running them. We have to pay the EMF, but if anyone else is paying them, or has been paying them, or will be paying them, that’s a secret.

• Coleman Young II proposed striking the EMF’s power to exert the most outrageous abuses of financial and political power. As drafted — and appalling to Young — the EMF can abrogate the Public Employment Relations Act (in effect in Michigan since 1947) and ignore or overturn longstanding contractual terms of collective bargaining.

Guess what: all those powers were retained by defeating the motion 26-12.

• Bruce Caswell (Dem) succeeded in a motion to strike subdivision (f) of page 37, line 26 — but since the document now doesn’t include it, I don’t know what it said! (My best guess is that they struck the EMF’s power to “Recommend to the governor, the legislature, and the superintendent of public instruction that the school district be reorganized with 1 or more contiguous school districts.” Sure… you wouldn’t want someone to have that kind of power!)

By the way, every motion but one passes from now on.

Since they pass (and no one calls for the Yeas and Nays) the Senate journal doesn’t tell us who voted for or against. It says only, “The amendment was adopted, a majority of the members serving voting therefor.” Irritating.

• Phillip Pavlov made amendments, apparently (again I must make an educated and tediously slow guess, since the documents available to the public no longer include the language that was stricken) to remove the local school superintendent from certain decisions, and reduce the EMF’s reporting requirements overall.

• Tonya Schuitmaker (Rep) offered one amendment that makes sense: that an EMF be subject to some minimal ethics guidelines. (Sadly these are virtually useless in Michigan, and rarely have the effect of obliging anyone to behave ethically.) But, at least an EMF shall be viewed “as a public servant… as a public officer… as if he or she were a state officer.” I’m relieved to say that’s from my own Senator. I’ll have to ask her why she voted earlier in the day against Democratic language to prohibit conflicts of interest.

• Philllip Pavlov (Rep) then amended his own bill again and again — nearly forty times — striking and adding bits of language that generally broaden how an EMF can work, with whom, and to what effect. Basically, letting more people join the party, if the EMF wants it.

The very last amendment before final passage is curious indeed — and it failed.

• Tory Rocca (Rep) apparently was trying to keep a financial emergency from being conjured up out of thin air. Rocca’s (final, failed) motion would have prohibited the most tenuous element of a financial review (“Any other facts and circumstances indicative of local government financial stress or financial emergency”). Rocca also wanted even such vague “circumstances indicative” to have the merit of actually existing, rather than being merely a “likely occurrence.” The motion failed 25-13, with Rocca the only Republican willing to recognize “reality” as a legal concept.

After all that, if you’re not disgusted by Michigan’s legislative process; offended by the attitude of the people now in charge in Lansing; and wondering how Michigan can survive this mindset… well… then I can’t imagine what would get your attention.

Also, if you’re not tired of reading, I recommend the commentary filed by Michigan’s Democratic Senators “under their constitutional right of protest” after the bill was passed. Here are few excerpts:

Senator Whitmer’s statement, in which Senators Hunter and Bieda concurred:

“I can’t believe that some of my colleagues can honestly go back to their constituents and communities after taking this vote. This impacts 100 local communities with Governor Snyder’s cuts to public safety via the revenue sharing proposal. This impacts 160 school districts statewide with Governor Snyder’s effort to slash our schools. Many of these cities and schools are in your districts. How can you stand by and cast a vote like this?”

“Wisconsin’s Governor Walker may be entering the front door on undoing workers’ rights, but make no mistake you all are sneaking in the back door to do the same thing with this vote.”

“I would ask the Governor and the Republican members of the Senate: Why are you okay with attacking the secretary who makes $35,000 compared—I would ask you, Governor, and the Governor you work for, and the members of your party: Why is it okay to challenge a secretary’s $35,000 a year job and have members in your cabinet who make $250,000 a year?” Why are you okay with attacking the firefighter who runs into a burning house, making $44,000 a year, risking their lives, and having a budget director making $250,000 a year? Why is it okay to attack a cop who ensures our community’s safety, making $46,000 a year, and not the emergency financial manager who can make upwards of $159,000 a year? Why is that okay?”

Senator Warren’s statement is as follows:

“Good partners do not set one another up for failure and punish each other when they are struggling. That is perhaps the most insulting thing about this legislation. No one will admit what it is really about. It is not about the state budget deficit or saving school districts or municipalities from receivership. If that were the case, we would all agree to meet our obligation and fully fund our schools and local communities and go home.

No, this is about circumventing decades of protections and due process rights that our grandfathers and grandmothers fought to secure. These are protections that changed the very landscape of the working and middle class in this state. It is about power, plain and simple.

And so today, I would like to apologize to our public employees throughout this state, and thank them for their service.”

Senator Young’s statement is as follows:

“I just want to begin with a quote. It is a quote from Daniel Webster. He said, “Whatever government is not a government of laws is a despotism. Let it be called what it may.” This bill, as good intentioned as it might be, as well thought out as it might be, is clearly a direct violation of our Constitution and the will of the people.”

“I understand the intention of fiscal responsibility, but this is not it. The definition of insanity is doing the same thing over and over and over again and expecting a different result. We have tried this once. We tried this again, and it has failed miserably. I’m talking Hindenburg bad. I’m talking the movie Gigli bad. It’s just an absolute bomb every single time.”

Senator Hood’s statement is as follows:

“Quite simply, we have heard a lot of comments about this piece of legislation, and I tried as my father tried to teach me to keep it as simple as possible I will do that right now. As we sit here and talk about House Bill No. 4214, I am going to use some words of my little niece and little nephew: “This bill stinks.”

There could be no more suitable summary.
 

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