Corporate-backed Officials Seek to Subvert Michigan Supreme Court Decision Allowing Vote on Public Act 4

Abayomi Azikiwe, editor of the Pan-African News Wire, addressing the National Conference for a Moratorium on Foreclosures in Detroit March 31, 2012. Azikiwe outlined the economic crisis that has evolved over the last four decades. (Photo: Bryan Pfeifer), a photo by Pan-African News Wire File Photos on Flickr.

Corporate-backed Officials Seek to Subvert Michigan Supreme Court Decision Allowing Vote on Public Act 4

Emergency manager law to be on ballot for November amid massive lay-offs, service cuts

By Abayomi Azikiwe
Editor, Pan-African News Wire

A long fought battle to place a referendum on the repeal of Public Act 4 is closer to realization with a Michigan 4-3 Supreme Court decision on August 3. Activists backed up by the AFSCME Locals in Detroit collected over 226,000 signatures in a petition drive to put the initiative before voters in November.

The validation of the petitions which could come as early as the second week in August, will nullify Public Act 4 until the issue is decided by voters in November.

Public Act 4, commonly known as the “dictator law,” is a union-busting racist piece of legislation passed during early 2011 by the Republican-dominated Michigan House and Senate. The law has resulted in the placement of Emergency Managers and consent agreements in the majority African American cities of Benton Harbor, Inkster, Pontiac, Flint, Ecorse, and over the school districts in Highland Park, Detroit and Muskegon Heights.

The law eliminates the authority of locally-elected officials to make basic decisions involving public lighting, economic development, educational policy, public transportation, public safety and other issues normally decided by municipal legislative councils and school boards. Public Act 4 has served as the legal basis for the evisceration of city services and the lay-offs of thousands of educational workers and civil servants.

The main organizing force behind the petition drive, which completed its work in February only to be delayed for 60 days by the State Board of Canvassers in Lansing, was the group Stand Up for Democracy. When the validation process for the petitions went before the Board of Canvassers it was deadlocked 2-2 along partisan lines.

Stand Up for Democracy was forced to go to the State Court of Appeals to demand that the referendum be placed on the ballot because two members of the Board of Canvassers said that the font size for the language on the petitions were not correct. This argument was struck down by the Appeals Court, however, conservatives backing the denial of the right to vote on the Emergency Manager Law appealed to the state’s highest court resulting in the narrow decision in favor of Stand Up for Democracy.

Conservative Officials Seek to Revive Old Law

Michigan has had an Emergency Financial Manager law in place for many years under Public Act 72. Nonetheless, Public Act 72 did not have the sweeping powers encompassed in Public Act 4, its successor.

Public Act 4 allows for the denial of collective bargaining rights for workers and can result in the appointment of entities such as Emergency Managers who are allowed to disregard the decisions of local officials.

State Treasurer Andy Dillon said in the aftermath of the August 3 Supreme Court ruling that “It’s our position that PA 72 comes back as if nothing had changed. In Detroit, which avoided the appointment of an Emergency Manager in April when in a 5-4 vote the City Council agreed to approve a Financial Stability Agreement (FSA), will see the emergence of a new round of struggle over whether the FSA is valid in light of the Supreme Court decision.

Two other legal challenges to the validity of the FSA for Detroit were dismissed by the courts. One challenge filed by the City of Detroit’s Corporation Counsel was immediately struck down by an Ingham County judge who said that Krystal Crittendon, the city’s top lawyer, did not have the authority to bring legal challenge to the issue since she was not supported by the corporate-backed Mayor Dave Bing.

Another challenge brought by three city employees was also dismissed because the judge in the case said there was no evidence that the FSA was illegal under the City Charter or that it was invalid because the State of Michigan owed the City of Detroit hundreds of millions of dollars for a failed tax-revenue sharing plan and other outstanding debts involving citations, water bills and land usage.

Opponents of Public Act 4 will seek once again in the courts to challenge the re-appointment of the existing Emergency Managers under Public Act 72. Moreover, Public Act 4 includes language indicating that the previous law was repealed.

Emergency Management and the Capitalist Crisis of the Cities

These laws giving state governments emergency powers are the banks and
corporations response to the economic crisis of the capitalist system that has evolved over the last five years. Detroit is said by the bank-driven Financial Review Team appointed by Gov. Rick Snyder to owe between $16-20 billion in long term debt.

In 2010 alone, the City of Detroit was forced to pay $590 million in debt service to the banks. City services are already in an abysmal state with an antiquated public transportation system, serious problems with lack of public lighting and imposed pay and benefit cuts to municipal and educational employees.

The imposition of the FSA in Detroit are making thing even worse. Recent actions by the Mayor and City Council will result in the elimination of City departments, the scaling down of the workforce by over 2,500 civil servants and the implementation of the City Employment Terms (CET) that in effect threw out the tentative contract agreements between the unions and the administration.

Atty. Jerome Goldberg, an organizer with the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shut-offs, said that the CET imposed on workers in the city may not stand in light of the Supreme Court ruling. With Public Act 4 suspended, Goldberg says that “the section which removes a City from the duty to bargain under the Public Employees Relation Act (PERA) after a consent agreement is entered cannot continue to stand.”

Goldberg continued noting that “Since the Emergency Manager Act is no longer in effect the City now is subject to PERA and must bargain with its unions. It will be interesting to see what the unions do now.”

Nonetheless, Mayor Bing and other proponents of the FSA imposed in Detroit say that the agreement signed on April 4 is a contract between the City and the State. Bing indicates that nothing will change with the ongoing austerity plans being enacted against the City and its residents.

Moratorium Needed on Debt Service

The Moratorium NOW! Coalition, which participated on a principled basis in the petition drive and other actions related to the repeal of Public Act 4, has also called for the suspension of debt-service payments to the banks. It is the banks that are strangling the city through the past and current usage of predatory lending utilizing credit default swaps (CDS) transactions subjected to high interest rates on artificially devalued municipal bonds.

Since 2008 the Moratorium NOW! Coalition has pushed for the declaration of a halt to foreclosures and evictions as well as utility shut-offs based on the ongoing and worsening economic crisis. The organization believes that the current program for financial stability is only designed to ensure that the banks get paid what they say is owed by the people of Detroit and other municipalities around the state under emergency management and consent agreements.

Moratorium NOW! Coalition activists have organized demonstrations to this effect against U.S. Bank and other institutions that are some of the largest holders of municipal debt. JPMorgan Chase and Bank of America are the top two beneficiaries of the municipal debt crisis through the collections of enormous amounts of public dollars which could go toward the restoration of municipal and educational services.