Public Act 4 of 2011, known as the Local Government and School District Fiscal Accountability Act, strengthened the powers of emergency managers who are appointed by the state to deal with local governments or school districts in “financial stress or financial emergency.”[*] The act empowered an emergency manager to, among other things, amend the local government’s or school district’s collective bargaining agreements with government-employee unions if the state treasurer approved.
But if Proposal 2 were approved, provisions of Public Act 4 related to wages, hours and other terms and conditions of employment for government employees would be subject to challenge. For instance, under the law, emergency managers would lose their ability to modify or terminate municipal and school board contracts or take remedial action to oversee local pensions funded below 80 percent.
[*] MCL §§ 141.1501-31 (suspended pending referendum vote). Technically, “emergency managers” were created by Public Act 4. The act’s predecessor, Public Act 72 of 1990, termed these state-appointed receivers “emergency financial managers.” “Public Act 72 of 1990, ‘Local Government Fiscal Responsibility Act’,” (Michigan Legislature, 1990), http://goo.gl/fg7g3 (accessed Sept. 25, 2012).