Limiting Noncompliance

Given that the language of Public Act 349 is relatively straightforward and that school districts still seem to have difficulty completely complying or understanding the law, policymakers may need to provide more than just additional guidance to change school district behavior and improve the level of compliance. School district officials may need more of an incentive to comply with these recent changes to state law.

In order to assure that district officials comply with Public Act 349, state officials could consider increasing financial penalties for noncompliance. The current financial penalty for not complying with Public Act 349 is a $500 fine to employers, unions and others.[122] As the evidence provided above suggests, this may not be a large enough penalty to spur school officials and unions to demonstrate compliance. The Legislature might consider a larger fine against school and union officials that ratify contracts that fail to comply with state law.

Another monetary option would be to provide additional funding for school districts that comply with the law. Michigan’s newest school aid budget includes “best practices” funding tied to district compliance with Michigan’s merit pay requirement and Public Act 103 of 2011, which prohibited collective bargaining over teacher personnel policies, including placement, layoff and recall.[123] The 2014-2015 school year will provide an experiment to determine the impact of this financial incentive.

Another possible way to increase school district compliance with state law could be through Michigan’s emergency manager law, which allows the governor to appoint an emergency manager to oversee financially unstable school districts and other local units of government.[124] The state could expedite the process of assigning an emergency manager for districts that fail to abide by state collective bargaining laws.  

The emergency management review process could begin for districts that have ended the most recent fiscal year in deficit and also have failed to remove prohibited language from their collective bargaining agreement.[*] If districts fail to remove that language and continue to overspend, the state could place them under emergency management.

This move would be justified because recent collective bargaining reforms, including the prohibition against making layoffs solely on the basis of seniority, are part of an attempt to help districts better manage their finances. District officials bypassing those laws while still overspending are not responsibly managing public resources and their school system.

Further, it is likely that if such measures were taken, few districts would be placed under emergency management as a result of their collective bargaining agreements. It is far more likely that the possibility of being placed under emergency management would motivate districts to follow state law.

[*] Currently, the financial review process would begin for districts that end a fiscal year in deficit and have failed to submit a “deficit elimination plan” to the state.