Michigan 'dictator law' voted downBy Diane Bukowski | Last updated: Nov 30, 2012 - 10:57:38 AM
In Detroit, 82 percent of voters, including many youth, opposed the PA 4 referendum, known as Proposal 1, tipping the balance.
Only eight of 83 counties voted to keep the act. Wealthy and populous Oakland and Macomb counties, which border Detroit, the largest Black-majority city in the world outside of Africa, were among the eight counties voting for Public Act 4, according to state election results.
“We did it!” exulted Monica Lewis Patrick during an impromptu celebration Nov. 9 at a downtown restaurant. She said chaos at many election sites in the city, including hours-long waits and a virtual uprising at the Coleman A. Young Recreation Center, did not discourage voters.
“I saw young women with their babies waiting in line,” activist Patrick said. “When we were campaigning, we talked to many young people at clubs and other places, to educate them about PA 4. We found that many were already familiar with the issues.”
Ms. Patrick works with Free Detroit-No Consent, a small group founded April 4, after Detroit’s City Council voted for a “Fiscal Stability Agreement” to stave off the appointment of an emergency manager under terms of PA 4. Under that agreement, a nine-member corporate-dominated Financial Advisory Board, two state-appointed city officials, and the state’s treasurer and governor have veto power over the city’s elected officials.
The Detroit Public Schools district is also suffering the effects of PA 4. More than half of the district’s schools are closed, and many others have been turned over to a state-run Educational Achievement Authority.
Significantly, Detroit voters also passed local Proposal C, which cements the power of the city’s Corporation Counsel to interpret and enforce the City Charter, by legal action if necessary. Corporation Counsel Krystal Crittendon earlier challenged the consent agreement in court but was shot down by a judge, who said he did not believe any city official could overrule the mayor.
Since the passage of the PA 4 consent agreement, Detroit has unilaterally imposed layoffs and wage and benefit cutbacks on its employees, while planning a pension system takeover. The city has shut down three key federally-funded departments. It plans to cut the workforce of the city’s mammoth Water and Sewerage Department by 81 percent, and lease the city’s world-renowned island park, Belle Isle, to the state for a total of 90 years including renewals.
“We realize that, like in the city of Detroit, you have roughly 35 percent of the people trying to manage 100 percent of the city’s costs,” Brandon Jessup, 31, the young Detroiter who birthed the PA 4 referendum petition drive, said in an interview with the Urban Policy Institute.
“We have some corporate entities in the city of Detroit that don’t pay their taxes annually,” Mr. Jessup explained. “They use the city of Detroit as a tax write-off. That’s not fair when we look at our city lights being off, our city buses pretty much breaking down, and you leave that to what, 30 percent of the community, that’s facing more pay cuts from whomever they may work for? ... Our problem is that we have too many hands idle in this state; we lost 867,000 jobs over a 10-year period. So no matter what you do, the state can’t intervene, the state has to create jobs, they have to get people back to work.”
Mr. Jessup founded Michigan Forward, working with a small crew and eventually with funds from the state’s largest public union, Michigan AFSCME Council 25, to gather over 240,000 petition signatures to put the referendum on the ballot.
Attorneys from Council 25 and progressive law firms fought a court battle which culminated with the state Supreme Court ruling the measure should go on the ballot.
The defeat of Public Act 4 is a Wall Street nightmare and may comprise part of what sent it into a tailspin after the elections Nov. 6. Most Wall Street pundits had said that stocks usually soar after a national election no matter which party wins the presidential race, but that did not happen.
Wall St. predatory lending to Detroit?
Joe O’Keefe of Fitch Ratings and Steven Murphy of Standard and Poor’s told Detroit’s City Council on Jan. 31 to approve a disastrous $1.5 billion pension obligation certificate bond, which Detroit has defaulted on twice. It added to the city’s mammoth debt burden.
Why? PA 4 guaranteed payment of the massive debt to banks owed by Michigan municipalities and school districts. It allowed state-appointed “emergency managers” or “consent agreement” administrators to unilaterally impose grueling austerity measures.
These included seizing and selling public assets, dissolving or merging cities, townships and school districts, eliminating collective bargaining, closing vital public services without a hearing, and privatizing services without legislative oversight by bodies like Detroit’s City Council.
“It has always been a tenet of municipal credit that at some point paying debt service may come in conflict with, and be superseded by, a government’s obligation to provide essential services such as education, public health, and safety,” Wall Street bond rating agency Fitch Ratings said in an Aug. 20 report.
The report goes on to stress the necessity for state intervention in such cases, and says Public Act 4 was “perhaps the strongest program in the nation, as it allows a state-appointed emergency manager to ‘reject, modify, or terminate terms and conditions of an existing contract.’ ” By “contract,” Fitch meant labor agreements.
“Flint, Benton Harbor, Ecorse, Pontiac, and Detroit Public Schools have all had emergency managers appointed to administer their financial affairs,” Fitch said in a report issued while the Michigan Supreme Court was deliberating the placement of PA 4 on the ballot.
State Attorney General Bill Schuette issued an earlier, non-binding opinion that the repeal of Public Act 4 would result in the restoration of the earlier, less stringent “Emergency Financial Manager” Public Act 72.
Until recently the daily media repeated Mr. Schuette’s opinion like a mantra. The Bond Buyer reported Oct. 12 that Mr. Snyder, State Treasurer Andy Dillon and the state budget director met with all three Wall Street ratings agencies in New York to argue for a restoration of Michigan’s AAA bond rating in anticipation of a $100 million state general obligation bond sale Nov. 8, two days after the election.
They stressed that even if PA 4 is repealed, PA 72 would be restored.
“That law lacks what is considered Public Act 4’s most powerful feature, the ability to unilaterally amend or terminate a labor contract,” the Bond Buyer reported.
Political leaders Snyder, Dillon and Bing are now frantically scrambling to find a fix, including the introduction into the state legislature of a new version of Public Act 4. Meanwhile, lawsuits filed by the Flint City Council, the Sugar Law Center, and others are pending in various courts calling for a reiteration of what the state’s Chief Supreme Court Justice has already declared:
There is no emergency manager law, financial or otherwise, on the books in Michigan.
Michigan’s people now face a head-on assault by Wall Street on their right to control their own destinies, not endure continued control by the banks and corporations which have devastated their lives.
“If it takes going to jail, that’s what we’re going to have to do,” one PA 4 opponent said Nov. 9 at the restaurant celebration.