On Nov. 5, 2002, Michigan voters will consider Proposal 02-03 ("Proposal 3"), an amendment to the state constitution that, if passed, would fundamentally alter the relationship between the State of Michigan and its employees. Proposal 3 would modify Article XI, Section 5 of the state constitution to establish a process of mandatory collective bargaining for state government employees, including a requirement that labor contract disputes be submitted to binding arbitration.

Since 1908, the bipartisan, four-member state Civil Service Commission (CSC) has had constitutional authority to establish wages and terms of employment for the vast majority of state employees. Since 1980, state employees have had the power to engage in collective bargaining under rules established by the CSC. Studies in 1995 and 2000 show that compensation of Michigan state government employees compares favorably to employees of other states as well as Michigan private sector employees.1

This analysis reviews the operation of the current system and contrasts it with the system that would be established under Proposal 3. The analysis concludes that Proposal 3 would result in the following:

1. Proposal 3 will replace a flexible system of labor relations with a more rigid, constitutionally mandated system of collective bargaining.

2. Proposal 3 will create legal uncertainty with respect to the authority of the CSC and the arbitration process.

3. Proposal 3 may permit state employee strikes.

4. Proposal 3 will increase the cost of state government.

If Proposal 3 passes, an apparently sound system will be displaced by a regime in which unions, elected officials, state personnel officers, the Civil Service Commission, and the courts will remake personnel and bargaining policy in an environment characterized by uncertainty, delays, and higher costs. There is no strong evidence that the system that emerges would work any better than the current system, however there is evidence that it would be less fair and efficient. Taxpayers and citizens will pay, through higher taxes and/or program cuts, for any inefficiencies or lower morale that results.