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Press Release

For Immediate Release
Jan. 19, 2010

Contact: Samantha Harkins
Legislative Associate, State Affairs
Ph: 517-908-0306

 

MML Responds to Senate GOP’s Proposed 2010 Reforms

 

LANSING, Mich.—To help local governments better control their costs, the Michigan Legislature should pass reforms proposed today by the state Senate that would reform PA 312 and remove roadblocks that impede the sharing of local services, Michigan Municipal League (MML) officials said.

“In recent years, declining property tax revenues combined with massive cuts to local revenue sharing approved by the Legislature have pushed communities toward insolvency,” said MML CEO and Executive Director Dan Gilmartin. “Failure to amend PA 312 and the Urban Cooperation Act as proposed today by the Senate will result in more public safety layoffs and more cuts to essential local services.”

The MML appreciates Senate Republicans for proposing these important reform initiatives to help local units of government control costs and create and maintain vibrant communities. However, the Senate must also consider tax reforms that reflect Michigan’s changing economy.

“Reforms are terrific because they will help local governments address the cost side of their balance sheets, but they do not solve Michigan’s structural budget deficit,” Gilmartin said. “We need a combination of reforms and revenues to create the types of places that can prosper once again.”

For more information, visit abilitytopay.org.

Background: Public Act 312

  • One of the most obvious reforms the Legislature could accomplish is to pass a common sense amendment to Public Act (PA) 312 of 1969. PA 312 is the state law regulating contract negotiations with police officers and firefighters.

  • Amending PA 312 will not cost the state a dime and will give local units of governments the ability to better control the largest expenses in their budgets — pay and benefits to public safety officers. Even more important, the amendment would keep more police officers and firefighters on the job serving our Michigan citizens.

  • Michigan’s public safety professionals have been reduced by 2,000 police officers and 2,400 firefighters since 2001. Amending PA 312 will put more public safety officers back on the streets in our neighborhoods. Michigan communities that have announced reduced police and/or firefighter jobs in the recent months include Grand Rapids, Troy, Hillsdale, Bay City, Ann Arbor, Lansing and many others.

  • In December 2009, the Michigan Municipal League asked the Legislature to pass House Bill 5325, which would amend PA 312 to make a community's ability to pay the most important factor in a decision and also define ability to pay. Amazingly, as PA 312 is currently written, it does not define ability to pay nor does it require arbitrators to consider a community's ability to pay as the most important factor in the arbitration, but just one of several criteria to consider. This means that if a community cannot pay the arbitrator can still make an unaffordable award based on other factors. This is the same as a family not considering whether they can afford the house or car they are buying … yet still being forced to buy the house or the car. Common sense tells us that before we can buy something, we need to know if we can afford it.

  • The result of this law is unrealistically high pay scales for officers and firefighters who keep their jobs. It also forces cities to reduce the number of police officers, firefighters and other programs and services in order to fund the unfair contract that the local government is forced to accept.

  • The largest part of any local government budget is labor costs. The biggest labor costs for local governments are police officers and firefighter wages.

  • Taxpayers are the obvious losers in all of this because they have to pay more to keep fewer police officers and firefighters on the job. This makes no sense.

  • Michigan currently has 18.6 officers per 10,000 residents, compared to a national average of 22.9 per 10,000 residents, according to research by the Michigan State University Extension State and Local Government Program. Our state has 6.9 firefighters per 10,000 residents, compared to a national average of 10.9 per 10,000.

Background:  Urban Cooperation Act

  • The Urban Cooperation Act (PA 7 of 1967) contains language which acts as a disincentive for consolidation of services.  It practically results in any intergovernmental service sharing between several communities to go to the highest level because no employee can be harmed. 

  • As an example, if two or more cities want to combine police units as part of an authority, the language in the act currently says that no employee may be harmed when combining departments. So if one community pays its officers $40,000 a year and another pays $50,000, the practical reality is that all would be bumped up to $50,000 instead of perhaps meeting in the middle at $45,000.  As a result, all employees would all have to go to the highest level of salary and benefits.  So, there is no real savings and no incentive to create an authority.  This also prevents a true collective bargaining process until the longest remaining contract expires. 

  • Legislation was introduced into the House last session to remove this language and allows local officials to negotiate with employees in a way that results in governmental consolidations, efficiencies and real cost savings for Michigan residents. 

  • The bills were watered down to do nothing by the House and passed over to the Senate.  The Senate re-strengthened the bill and considered it, but it was defeated when the firefighters convinced the Democrats and two Republicans that it is bad for employees. 

  • Several communities have passed resolutions in support of the strong versions of these bills including Lansing and Grand Rapids.

  • The bills have been reintroduced this session but have not yet moved. They are HB 5090 (Denby) and HB 4151 (Opsommer).

For additional information and a short video explaining the issue, please visit abilitytopay.org.

The Michigan Municipal League advocates on behalf of its member communities in Lansing, Washington D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services. For more information, visit mml.org.

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