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Tuesday, March 22, 2011

Michigan Governor Rick Snyder outlines his draconian cuts to state shared revenue payments

Rick SnyderImage via Wikipedia
Michigan's Governor Rick Snyder
(R) outlines his plan to cut state
municipalities shared revenue

Michiganders on Monday, March 21st, learned the raw details on what Gov. Rick Snyder proposes to mandate on cities, townships and counties, if his fiscal budget which would start October 1st is passed by the Republican Controlled state House and Senate. 

As speculated Gov. Snyder, in his speech in Grand Rapids, has proposed the complete elimination of nearly $300 million in statutory revenue sharing payments for Michigan municipalities.

Instead, Gov. Snyder’s new program would make a $200-million pot of money available.  Communities far and wide would have to compete for those dollars based on performance metrics. 

Funding in the program’s first year would be available to communities that were expected to receive more than $6,000 annually under the existing revenue sharing system.

Additional qualifications for the first year eligible municipalities are that they must meet best practices in three categories: accountability and transparency, service consolidation, and employee compensation cost controls. Municipalities would receive one-third of their funding for each category of best practices that they meet, Snyder noted during his speech.

The city of Detroit is expected to lose under Gov. Snyder’s plan up to $60 million dollars, on top of its’ population lost –which is the lowest since 1910 at 713,000.

Suburban cities including Canton –who is facing an estimated $15 million dollar deficit of its’ own-- Wayne, Westland, Ypsilanti, Ypsilanti Township and other cities depend on Detroit’s Water Department for supplying sewer, wastewater treatment and drinking water services into their communities.

With such a large budget hole for the city of Detroit, if Gov. Snyder’s budget is passed, it is yet unknown what will happen to these suburban locations water services.

Detroit Mayor Dave Bing said in a statement reduction would be "a serious impediment to our progress," noting that the city has whittled down an accumulated deficit of $330 million to $150 million.
"I recognize the need for shared sacrifice. However the state must step up to provide local governments like Detroit the tools we need to make the fundamental changes necessary," Bing noted.
Robert Cannon, supervisor of Clinton Township, said his community has made some of the changes Snyder recommends. Still doesn't like linking revenue sharing to the outcome of bargaining with employee unions, according to the Detroit Free Press.
"The governor is making a good effort, but he doesn't have to do it," Cannon said. "We do."
A complete list of revenue sharing cuts to various Southeastern Michigan cities is available at the Detroit Free Press site.

Under the Snyder plan, communities would be asked to produce a citizens’ guide to the community’s finances by Oct. 1st, and “dashboard” to measure performance. Mandates in the plan call for addressing employee compensation issues in union contracts are that were previously negotiated; requiring employees’ to pay at least 20 percent of their health insurance premiums and placing new hires on less-expensive defined contribution retirement plans.

Snyder said he's also asking the Legislature to amend State Act 336, the Public Employment Relations Act, so that the consideration of an intergovernmental cooperation agreement by local governments cannot be considered an unfair labor practice.

Michigan has laws that enable government consolidation and cooperation, but they include clauses that prevent the immediate negotiation of new union contracts. Gov. Snyder, under his believes laws should be amended so that upon a merger of services, management and employees immediately begin the collective bargaining process.

In opposition, Democratic Leader Gretchen Whitmer (D-Ingham) announced on March 17th, to formally introduce a resolution announced that would amend Michigan’s Constitution to guarantee every worker the right to organize and collectively bargain. Democrats called on Governor Snyder to definitively state his position on the amendment to clarify the apparent disconnect between his actions and his words.
“Governor Snyder likes to talk about supporting the collective bargaining process, yet pushes through legislation that will strip away those rights away from Michigan’s workers one piece at a time,” said Senator Bert Johnson (D-Detroit). “The thousands of workers that came to Lansing yesterday to voice their concerns deserve a clear answer from him on this issue.”
State Senator Whitmer added, “Senate Joint Resolution I would add Section 28 to Article I of the state Constitution and simply state that “Every person shall have the right to form, join, or assist labor organizations and to bargain collectively through representatives chosen by the members of the labor organizations as to wages, benefits, and conditions of employment,” Whitmer noted.
Governor Snyder, during his news conference, also noted that he is seeking additional reforms to Public Act 312, which provides binding arbitration for public safety unions, so that a community’s ability to pay is a fundamental factor in a state arbitrator’s decision. Under his plan the arbitration process would not be able to take longer than 90 days.

Local governments would allowed to share within a pool $659 million in constitutionally protected revenue sharing payments.

The debate could get heated tonight between the largest city in the state Detroit and the state’s Chief Elected-Executive Officer. WXYZ Channel 7 plan to broadcast one of their ‘Detroit 2020’ segments featuring Michigan Governor Rick Snyder and Detroit Mayor Dave Bing taking on citizens questions during a live one-hour broadcast from 7PM to 8PM. Questions can be sent via Twitter, Facebook and at the channel's announcement website.

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