Nick Krieger (@nckrieger):
The city of Detroit, the city of Flint, the city of Hamtramck, the city of Benton Harbor, the Detroit Public Schools, the Highland Park Public Schools, the Muskegon Heights Public Schools, and the list goes on. These municipalities and school districts have all been subjected to state-imposed management under Michigan’s current emergency manager law, the Local Financial Stability and Choice Act, 2012 PA 436 (“Public Act 436”). It is becoming increasingly clear that Public Act 436 must be repealed. But how, exactly, can this be accomplished?
You’ve probably heard it before. It goes something like this: “The voters repealed the former emergency manager law in 2012, but they can’t repeal Public Act 436 because the Legislature ‘referendum-proofed’ it by adding an appropriation.” This statement is only partially true. But first, a little background:
Michigan has had several emergency manager laws over the years. Originally, these statutes were limited to assuming control of a municipality’s finances. These former laws allowed the state to appoint a financial manager to rein in a municipality’s spending, restore sound money-management principles, or implement a plan to get out of debt. Under Michigan’s 1990 law, for example, financial managers had limited powers. They were not authorized to completely suspend democratically elected local governments, unilaterally cancel contracts, or replace local elected officials.
This all changed in 2011, however, when the Michigan Legislature adopted the Local Government and School District Fiscal Accountability Act, 2011 PA 4 (“Public Act 4”). Public Act 4 repealed and replaced the 1990 law, and significantly expanded the role of emergency managers. Under the new Public Act 4, emergency managers were authorized to unilaterally approve budgets, adopt ordinances, remove or replace members of boards and commissions, disincorporate and dissolve municipal governments, cancel contracts, suspend collective bargaining agreements, assume control of pension plans, eliminate positions, terminate employees, and completely suspend the powers and authorities of city councils, mayors, city managers, school boards, and school superintendents. Public Act 4 was signed by Governor Rick Snyder on March 16, 2011, and took effect that same day.
As people began to learn about Public Act 4, the opposition quickly mounted. Petitions seeking a referendum were filed with the Secretary of State. On a 2-2 party-line vote, the Board of State Canvassers initially refused to certify them. However, the Michigan Supreme Court subsequently ordered the Board to certify the petitions and submit the matter to the voters.
On August 8, 2012, in compliance with the Supreme Court’s order, the Board of State Canvassers certified the petitions and voted to place the referendum on the November general election ballot. At the general election of November 6, 2012, Michigan’s electors rejected Public Act 4, thereby repealing it in its entirety and temporarily reviving the 1990 law.
This did not deter the Michigan Legislature. Within a month of the November 2012 election, the Legislature had set its sights on Senate Bill 865—a marginally related, already-pending bill that it would gut, rename, amend, lengthen, and use as a vehicle to reestablish an emergency manager law that was even more Draconian than the one just repealed. On December 12, 2012, the Michigan House of Representatives passed Senate Bill 865, as amended, on a party-line vote. The Michigan Senate passed the legislation the very next day, with all Democrats and three Republicans voting in opposition. Governor Rick Snyder signed the bill on December 26, 2012, creating Public Act 436. As noted, Public Act 436, which took effect on March 28, 2013, is the emergency manager law that exists in Michigan today.
Public Act 436 is similar to its predecessor statute, but confers upon emergency managers even greater powers to suspend the authority of local units of government, revoke actions taken by those units of government, and replace local officials.
In a nutshell, here’s how it works:
As soon as a local financial emergency is declared under Public Act 436, the affected municipality or school district is placed in a state of “receivership.” During the receivership, the state-appointed emergency manager may exercise all powers that he or she deems necessary to operate the local unit of government. The emergency manager has the power to approve budgets, remove or replace appointees, dissolve municipal governments, cancel contracts, suspend collective bargaining agreements, terminate employees, and set salaries. The emergency manager may also issue rules and orders, and exercise any other power that may be necessary to carry out the purposes of the law. The elected mayor, elected city council, elected school board, city manager, or superintendent of schools may not exercise any powers whatsoever during the receivership, except those that are specifically delegated in writing by the emergency manager. In short, Public Act 436 empowers the emergency manager to assume total control over the local unit of government until the state of Michigan declares that a financial emergency no longer exists.
Now, back to that issue of appropriations and “referendum proofing”:
The people of Michigan have reserved unto themselves the constitutional powers of the initiative and the referendum. Through the initiative, the people may directly propose and adopt laws of their own choosing. Through the referendum, the people may directly repeal objectionable laws that have been adopted by the Legislature.
The initiative process and the referendum process are both invoked through the submission of petitions. For the initiative, petitions must be signed by a number of registered voters equal to 8 percent of the total votes cast for the office of governor at the most recent gubernatorial election. For the referendum, petitions must be signed by a number of registered voters equal to 5 percent of the total votes cast for the office of governor.
The Michigan Constitution specifies that the referendum process does not apply to any law “making appropriations for state institutions or to meet deficiencies in state funds.” Public Act 4 did not contain an appropriation of state funds. That is why it was subject to repeal by the voters through the referendum process.
In contrast, Public Act 436 includes a total appropriation of $5,780,000. The Michigan Legislature claims to have included this appropriation for the purposes of “administer[ing]” the new statute and paying the salaries of emergency managers. However, many observers believe that the appropriation was actually included to prevent another referendum.
Under Michigan law as it stands today, this much is clear: Because Public Act 436 contains an appropriation of state funds, the people of Michigan may not repeal it by way of the referendum. This is not the end of the story, though, because the people retain the right to repeal Public Act 436 through the initiative process.
The initiative process allows the people to propose and adopt any law that the Legislature would be constitutionally authorized to enact. It is common practice for the Michigan Legislature to repeal existing public acts through the passage of one-sentence bills, specifying simply that “Public Act X is repealed” or “Public Act Y is repealed.”
Through the initiative process, the people of Michigan may propose and adopt just such an act, stating simply that “the Local Financial Stability and Choice Act, 2012 PA 436, MCL 141.1541 to 141.1575, is repealed.” Indeed, there are bills pending in both the Michigan House of Representatives (House Bill 5260) and Michigan Senate (Senate Bill 734) that would do just this. The problem with these pending bills is that they have no chance of getting through the Republican-controlled Legislature.
But by employing the initiative process, the people may circumvent the Legislature and directly enact a law repealing Public Act 436 at the ballot box. In doing so, the people should consider including additional statutory language as well. Specifically, the initiated legislation should provide that a local unit of government shall not be subject to management or control by a state-appointed financial manager, emergency manager, administrator, commission, loan board, financial board, transition board, task force, or any other state-appointed official or group of state-appointed officials without the unanimous consent of the members elected to and serving on the governing body of the local unit of government. This language would prevent the Legislature from immediately reenacting an identical or substantially similar emergency manager law following the repeal Public Act 436.
Lest there be any doubt concerning the use of the initiative process to repeal an existing statute, I would simply point out that it has been done before. At the general election of November 1972, the people of Michigan adopted Proposal A (no, not the school-funding Proposal A—that was in 1994), which repealed 1967 PA 4. This was an initiative—not a referendum.
Now, one last thing: Remember how the Legislature blatantly disregarded the will of the electorate by adopting Public Act 436 immediately after the voters repealed Public Act 4? For the reasons stated in Reynolds v Bureau of State Lottery, 240 Mich App 84, 99-102; 610 NW2d 597 (2000), Michigan law allows the Legislature to do this—that is, to enact a successor statute immediately following the repeal of an identical or similar statute through the referendum process.
However, the initiative is different. In Michigan, a law that is initiated and adopted by the people can only be repealed in one of three ways: (1) by a subsequent vote of the people, (2) as provided in the text of the initiated statute itself, or (3) by a vote of 3/4 of the members elected to and serving in each house of the Legislature. These constitutional safeguards are intended to protect the voters’ decision on initiated legislation. Accordingly, if the voters were to adopt initiated legislation that included something like the aforesaid language—providing that no local unit of government could be subject to state emergency management without the unanimous consent of the local governing body—the Michigan Legislature could not subsequently overturn their will by simple majority votes in both chambers.
In recent days, we have heard a great deal about recalling Governor Snyder. While recalling Snyder sounds appealing, it’s important to remember that he would almost certainly be replaced by Lieutenant Governor Brian Calley, unless through some unlikely series of events Calley were to be recalled first. Recalling Governor Snyder would also require the collection of 789,133 valid signatures within a 60-day period—not an easy feat.
Let us not forget that state-imposed emergency management has caused many of the problems that we face today, including the Flint Water Crisis and the catastrophe in the Detroit Public Schools. I suggest that an initiative to repeal Public Act 436, including statutory language barring or severely limiting the use of state-appointed emergency managers, would be both less expensive and more immediately helpful than a recall of the governor. Unlike a gubernatorial recall, such an initiative would require the collection of only 252,523 valid signatures, and petition circulators would have 180 days rather than 60 days to complete their task.
The concept of state-imposed emergency management is incompatible with Michigan’s long tradition of local control and home rule. By permitting the voters to elect their own local officials, but then stripping all power away from those local officials without the consent of the voters, Michigan’s legislative majority has acted duplicitously, faithlessly, and without regard for the people of our state. It is time to restore the sanctity of local elections. It is time to repeal the emergency manager law.