Communities Controlling Their Own Costs
PA 312 and Mandatory Binding Arbitration
Source: The Detroit News
Editorial: Repeal laws favoring unions over taxpayers
Michigan could accomplish two things by repealing a pair of state
laws that reflect Big Labor's stranglehold on the political process: It
could generate money for covering the budget deficit, and it could send
a strong signal that politicians now work for the people, not the
These two statutes are among the most egregious examples
of how public policy is crafted to appease powerful special interests
and not to serve the needs of the public.
Act 312. This law, providing for binding arbitration of police and fire labor
disputes, was written by Coleman A. Young in 1969 when he was in the
state Legislature and currying favor from union bosses. But when Young
left the Senate to become mayor of Detroit and had to sit across the
bargaining table from those same unions, he came to regret the damage
Current Mayor Kwame Kilpatrick is calling on
lawmakers to change Act 312, and they should give him what he wants.
The law has driven up the cost of public safety -- average pay for
police and firefighters rose at double the rate of other municipal
workers after its passage -- and forced communities to cut other
services or raise taxes to meet the obligations of arbitrated contracts.
the act, if a city and its public safety unions can't come to an
agreement, the dispute must go to an arbitration panel. On matters of
pay and benefits, the panel must choose between the best offer from the
city and the best offer from the union. There is no middle ground and
no requirement that city finances be taken into consideration.
act adds 5 percent to 10 percent to the cost of police and fire labor
contracts, according to economists who have studied its impact.
Jennifer Granholm was asked point-blank during her appearance at the
Detroit Regional Chamber's Mackinac Policy Conference whether she'd
support a repeal of binding arbitration. She answered "Yes," much to
the delight of her audience. But then she waffled into a discussion of
modifying or softening the act, rather than its repeal.
arbitration has cost the state taxpayers enough money. Other workers
have to reach contracts through good-faith bargaining and under the
weight of the financial conditions of the community. Public safety
officers should be no different.
The Prevailing Wage Act. This law keeps school districts, municipalities and the state from
getting the best deal for the taxpayer dollar. It requires that for all
publicly financed construction projects, workers must be paid the
equivalent of a union wage, whether or not they belong to a union.
The law, passed in 1965, adds an estimated 10 percent to the cost of all public construction work in Michigan.
And Michigan vigorously enforces the act, just this week establishing a Web site to list violators.
Ohio has moved in the other direction. It repealed the prevailing wage
law in 1997 for school construction projects. Savings in the first two
years were estimated at $135 million on $2.7 billion in construction
work. And school districts reported that the quality of the work either
stayed the same or improved.
Michigan could expect similar savings, if not more, by repealing its prevailing wage law.
Elected officials have a fiduciary responsibility to taxpayers to use their dollars as prudently as possible.
allowing binding arbitration and prevailing wage laws to remain on the
books, Michigan's leaders are failing in that responsibility and making
a bad budget situation worse.