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Financial Manager Bill Approved by Michigan Senate

Lansing The state Senate approved a bill that would authorize emergency financial managers to junk union contracts and repeal elected officials in financially aggrieved municipalities and school districts last Wednesday. Resembling bill passed in the House in February, and the two chambers are working on a final version to send to Gov. Rick Snyder.Gov. Snyder has requested for more authority for emergency financial managers and is anticipated to approve the legislation into law.

The bill lays out a detailed measure to assists communities and school districts right their finances. However labor union and local officials disagree to provisions that would let emergency financial managers to disregard union contracts, invalidate local ordinances, and dismiss city councils and school boards.

Minority Leader Gretchen Whitmer, D-East Lansing, described the bill as an "unfair and unjustified power grab."

Whitmer claimed that this bill corresponds to bigger government, more bureaucrats (and) less accountability and less transparency. His statement built up a cheer from opponents outside the chamber that could be heard on the Senate floor. “Where the heck is the tea party now?

The chambers are of one mind on the crucial elements of the bill, which would give emergency financial managers almost absolute power to control purse strings.

The bill also authorizes school district emergency financial managers, complete authority over academics and curriculum.

Republican Patrick Colbeck of Canton said, "I wish we didn't have to put a bill like this forward, but fiscal responsibility is one of the reasons I was elected in office."

The House and Senate versions offer a long list of stimulators — such as overlooked vendor payments or failing to make payroll — that could result to an evaluation of a community's or school district's financial affairs by a state review team.

The state review team would be able to bargain a consent decree with the school district or local government that would detail steps they must adopt to refrain from going into bankruptcy and having a financial manager assigned for them.

If the governor and treasurer, together with the state school superintendent if it’s a school district, agree that there’s a financial emergency, they could put a recovery plan in place, or an emergency financial manager could be appointed by the treasurer.

A Democratic amendment blocked by Republicans last Wednesday would have restricted the salary of financial managers to that of the governor, which is estimated at $177,000.

Although Snyder has declared he will accept only a dollar in pay this year.

When the vote tied, it was Lt. Gov. Brian Calley who tossed the deciding vote against the amendment.

Republican Sen. Phil Pavlov of St. Clair Township explained restricting the salary "would eliminate a lot of people" who might otherwise take an emergency financial manager position. The Republican Senator is the bill’s sponsor.