On Thursday, Governor Rick Snyder signed an emergency manager bill into law, giving the power of oversight and financial efficiency back to Michigan localities.
"These new laws recognize the vital importance of financially stable, economically vibrant communities to Michigan's future. They also respect the needs of citizens and taxpayers by delivering greater oversight and efficiency. Our reinvention of government is delivering meaningful reforms that will keep Michigan on the path to prosperity."
The prior 2011 emergency manager law had numerous shortcomings. It prevented elected officials, such as mayors and city council members, from making any kind of spending decisions. According to House Speaker Jase Bolger (R-Marshall) the new law will give local governments in financial emergencies more options than the current system allows.
"We listened to the voters and we wanted to make sure that the local communities were more empowered," Bolger said in an interview with The Detroit News. "You can eliminate the emergency financial situation. … You can't pretend that's not there."
After the voters repealed the 2011 law this past November, the state reverted back to a 1990 version of the law which was ineffective in dealing with budget deficits.
The Detroit News reports:
Under the new law, the state could review the finances of a city or school district if the entity defaults on debt payments, has a six-month-old overdue bill of at least $10,000, fails to make payroll for a week or if requested by the governing body or chief administrative officer.
Emergency managers would have the ability to reject, modify or terminate labor union agreements — sweeping authority granted under the repealed 2011 law. Collective bargaining could be suspended for up to five years.