Michigan Gov. Rick Snyder signed a revised version of a controversial emergency manager law Thursday that was rejected by voters during the November election.
“These new laws recognize the vital importance of financially stable, economically vibrant communities to Michigan’s future,” Snyder said in a statement. “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.”
Both houses of the state legislature approved the bill during the lame-duck session. The new law takes effect 90 days after the end of this year’s legislative session, according to Bloomberg.com.
The revised law is similar to Public Act 4, which was struck down in a state referendum last month. One major difference is that the new law gives communities and school districts more options — allowing them to choose to take on an emergency manager, go into bankruptcy, enter mediation or enter into a special partnership known as a consent agreement with the State of Michigan. But, thanks to a mechanism for the state of Michigan to finance emergency manager salaries created by inserting a $770,000 appropriation to the legislation, this newly revised law will not be subject to voter referendum.
“This legislation demonstrates that we clearly heard, recognized and respected the will of the voters,” Snyder said. “It builds in local control and options while also ensuring the tools to protect communities and schools districts’ residents, students and taxpayers.”
Emergency managers are special officials appointed by the state who are authorized to run financially struggling cities and school districts. Under Public Act 4 managers had the power to overrule local elected officials, sell public assets and modify or terminate contracts. Current policy, which follows Public Act 72 of 1990, allows the state to appoint Emergency Financial Managers who have more limited powers.
“PA 72 does not provide all of the tools that are necessary to address financial emergencies in Michigan municipalities and school districts,” State Treasurer Andy Dillon told the Detroit Free Press after a draft of the new law was released. “Gov. Snyder feels strongly that he has a responsibility to protect the health, safety and welfare of our residents and children.”
Like Public Act 4, the revised emergency manager law still gives managers special powers, but it allows local elected officials to request a dismissal by the governor within a year and lets elected governing bodies remove managers with a two-thirds vote.
Michigan House Democratic Leader-Elect Tim Greimel (D-Auburn Hills) earlier told local news station WXYZ he considered the revised law a slap in the face to the voters who repealed it last month.
“We need a new approach here. An approach that encourages collaboration between experts that are appointed from Lansing and local elected officials, and unfortunately, this bill doesn’t do that,” said Greimel.