Sensationalism and misleading claims cloud debate over emergency financial manager bill, House speaker says

As labor leaders and union members gather at the state Capitol to protest the emergency financial manager bill, Speaker of the House Jase Bolger has composed a letter to journalists and activists to set the record straight on what the EFM legislation actually entails.

“Unfortunately, there is quite a bit of sensationalism occurring in many venues that is based either on earlier versions of the legislation or deliberate attempts to mislead people about the content of the bills under consideration. I welcome robust debate, but I fear the inaccuracies are being spread by some to protect their current status quo — a status quo that clearly is not working in Michigan,” the Marshall Republican wrote.

According to the speaker, pro-active steps to prevent insolvency come first and appointing an EFM comes last, at the point when a local unit of government or school district is facing bankruptcy.

Here’s one key point that has been missed in the news accounts of the EFM provisions: Up to 90 percent of local government expenses are related to contracts for labor and services. Under current law, Bolger notes, EFMs are not able to touch contracts.

The proposed legislation would allow for renegotiation with the bargaining unit. If resolution cannot be reached to save the local government, the EFM could dissolve contracts. But negotiations would resume on a new contract. The EFM could not simply impose new compensation levels or work rules.

That’s an important point that’s been lost or misconstrued by the pro-union forces trying to derail the bill. Collective bargaining is not eliminated.

“Without the ability to adjust 90 percent of a unit’s expenditures, there is little the EFM can do to avoid insolvency and potential bankruptcy,” Bolger wrote. “That’s why the EFM legislation must include provisions to renegotiate and address contractual obligations of the municipality or school district. Those who argue against this ability seem content to allow a local government to be forced toward bankruptcy, leaving the taxpayers with the associated tab, in order to preserve their own individual status quo.”