As noted above, when Congress passed the LMRDA, it crafted an act that reaches almost every type of private sector labor organization in the country. Regulation of public sector labor unions that represent employees of state or local governments is left primarily to the states. As such, the states are free to set their own standards as they apply to items such as financial disclosure. Unfortunately, Michigan has fallen short by requiring only the filing of the Audit Cover Sheet.

The first, and best, option for enhancing disclosure for Michigan’s public sector unions is to pass legislation creating an enhanced disclosure regime that provides information similar to that found on the Form LM-2. For smaller Michigan public sector unions, simplified reporting could be created, or the current Audit Cover Sheet could be retained.

Placing the enhanced disclosure requirements into statute, as opposed to delegating that authority to MERC, would help ensure that the disclosure requirements remain in place. Changing a statute is generally a much more difficult process than changing a regulation. Thus, once in place in the statute, the disclosure requirements would be more likely to remain over the long term than if they were merely regulatory.