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Public Act 4 no longer in play in Detroit

Detroit's financial review team was given the okay to meet yesterday morning by the Michigan Court of Appeals, clearing the way for them to vote to approve the consent agreement between the city and the state in the afternoon. And, last night, the Detroit City Council followed suit in a 5-4 split decision, agreeing to the consent agreement, actually called the "Financial Stability Agreement", which gives city leaders some measure of control, including choosing some of the members of the financial advisory board.

Under the deal, a financial advisory board whose members would be appointed by Gov. Rick Snyder, Mayor Dave Bing and the City Council would advise and review all budget matters and grant approval of union contracts. [...]

Snyder would appoint three members to the advisory board. Bing and the council would appoint two each and would jointly appoint another with Snyder. The state treasurer would appoint one member.

The 5-4 council vote came just 24 hours before Snyder's deadline for appointing an emergency manager, who, among other broad powers, could gut union contracts, cancel contracts with city vendors and eliminate departments to rein in the city's runaway budget troubles.

The council vote came after the influential Council of Baptist Pastors of Detroit and Vicinity announced they had thrown their support behind the consent deal over more draconian options and some angry residents accused city leaders of turning their backs on the city's legacy of unionism and its place as a majority black-run city.

You can read the 59-page Financial Stability Agreement HERE.

The entire process appears to be taking its toll on Detroit Mayor Bing who was readmitted to the hospital yesterday.

Although the agreement was signed and it is expected to be ratified by Mayor Bing and Governor Rick Snyder, as well, there are still lawsuits pending regarding violations of the open meetings act and by unions to prevent the agreement from impacting their negotiated collective bargaining agreements.

[E]ven with an agreement in place, lawsuits aren't likely to stop anytime soon.

State and federal judges still have to determine whether state and city officials violated the Open Meetings Act while negotiating the deal and whether certain components of the plan are legal.

Union activist Robert Davis, whose lawsuits often stymied efforts to negotiate a plan dealing with the city's financial crisis, has vowed "to take this to the appropriate courts until the law is followed." [...]

Labor unions are suing Gov. Rick Snyder and state Treasurer Andy Dillon to stop the state and city from using a consent agreement to impose tough new contracts on city employees after labor unions negotiated new contracts and $68 million in concessions with Mayor Dave Bing's administration.

"These are not small issues," said Richard Mack, an attorney for AFSCME representing a coalition of 33 labor unions suing the state.

This agreement locks Detroit's fate in place even if the effort to repeal Public Act 4 is successful. We will know in the next 2-3 weeks if enough valid petition signatures were gathered. If they were, Public Act 4 is put on hold and there will undoubtedly be a court challenge regarding what happens next. Some feel that the predecessor to Public Act 4, Public Act 72, will go back into place. Others feel that, because PA 4 replaced PA 72, that Michigan simply will no longer have an Emergency Manager or Emergency Financial Manager law until the November vote decides the fate of PA 4.

Nevertheless, by signing the financical stability agreement with the state, the outcome of the repeal effort will not impact their situation in any tangible way.

This agreement keeps Detroit from facing a complete takeover and seemed to be the best compromise between doing nothing and the draconian step of imposing an Emergency Manager. Clearly something must be done. What I will continue to say, however, is that getting the books balanced is only part of the long-term solution. Until our state begins to reinvest in our aging manufacturing cities, investments that will help them become attractive to businesses looking to set up shop in our state or to expand their operations, all of this is simply hand waving before the cities eventually implode. Without a reinvestment strategy to rebuild these cities, the so-called "rising tide" that massive cuts to corporate taxes is supposed to stimulate will simply pass by cities like Benton Harbor, Pontiac, Flint, Highland Park, Ecorse, Inkster and, yes, Detroit. It's my fervent hope that our CEO governor and his Republican colleagues in the state legislature figure that out.

[Image credit: Anne C. Savage, used with permission.]

9:29 AM PT: Cross-posted from (the new & improved!) Eclectablog.

Originally posted to Eclectablog - eclectic blogging for a better tomorrow on Thu Apr 05, 2012 at 09:25 AM PDT.

Also republished by Michigan, My Michigan.

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    "Back off, man. I'm a scientist."
    -- Dr. Peter Venkman

    Join me & LOLGOP at the new & improved

    by Eclectablog on Thu Apr 05, 2012 at 09:25:02 AM PDT

  •  Thanks for keeping this situation at the (6+ / 0-)

    forefront.  All of these MI cities have resources that could be redeveloped to enhance their economies and community life.  Detroit should start with a Detroit Aide concert that has all the great music talents from this city returning to perform pro bono, giving a major boost to the city.  It would be tough to do, but there are multiple venues around the city that could provide the chainlink excitement that the jazz festivals used to.  Detroit media is in a state of atrophy.  Fresh talent in radio, TV and street theatre would help as well.  The river is another area that cries out for artistic attention.
    Inkster is next to one of the notable international airports and could draw folks eastward for a momemt rather than routing them directly to Ann Arbor or onward on I-94 to Detroit.  There are great health care and educational facilities in all directions from Metro Airport.  Additionally, Amtrak is supersizing its run from Dearborn to Chicago, making a far faster connection.  And so on.
    We have to hope that new and younger leaders will emerge in all these cities and will attract entrepeneurs.

    Romney went to France instead of serving in our military, got rich chop-shopping US businesses and eliminating US jobs, off-shored his money in the Cayman Island"s, and now tells us to "Believe in America."

    by judyms9 on Thu Apr 05, 2012 at 09:51:00 AM PDT

    •  Great comment (6+ / 0-)

      I'm happy to keep posting about this stuff but, as the lack of interest in this post shows, I think most Kossacks are sick of me writing about it. I've pulled back substantially. If people want to keep up (which I'm not certain they do), I post about it regularly at Eclectablog and do weekly news round-ups of all the stuff that's happening regarding PA 4 and its repeal.

      "Back off, man. I'm a scientist."
      -- Dr. Peter Venkman

      Join me & LOLGOP at the new & improved

      by Eclectablog on Thu Apr 05, 2012 at 09:59:04 AM PDT

      [ Parent ]

      •  I disagree (4+ / 0-)

        But that may be because I live in Meeeshigan and this affects my life.

        Keep writing Eclectablog, I'll keep reading.

        -6.25 -7.08 The glass is neither half-full nor half-empty. The glass is just twice as large as it needs to be. If you play Microsoft CD's backwards, you hear satanic things, but that's nothing, because if you play them forwards, they install Windows.

        by Unit Zero on Thu Apr 05, 2012 at 10:04:33 AM PDT

        [ Parent ]

      •  PS - Annes photos are incredible (2+ / 0-)
        Recommended by:
        2thanks, jennifree2bme

        That Detroit skyline is amazing

        -6.25 -7.08 The glass is neither half-full nor half-empty. The glass is just twice as large as it needs to be. If you play Microsoft CD's backwards, you hear satanic things, but that's nothing, because if you play them forwards, they install Windows.

        by Unit Zero on Thu Apr 05, 2012 at 10:06:02 AM PDT

        [ Parent ]

      •  No Easy Answers (5+ / 0-)

        Eclectablog, I don't think that Kossacks are sick of this stuff.  Rather, they're frustrated because there are no easy answers.

        Detroit needs more revenue.  But where does this revenue come from?  There are people buying real estate in Detroit who are paying property tax in excess of 8% annually.  

        And what do you do about public servants.  Many Kossacks have praised President Obama's bailout of the automotive sector.  Yet, that bailout provided for new hires to make 50% less than legacy hires, along with fewer benefits.  Would those Kossacks also support a similar framework for public servants in Michigan?

        Eclectablog, what is the structural deficit in Detroit, as a % of revenue, and what revenue sources/cost cuts have the Mayor's supporters proposed?

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

        by PatriciaVa on Thu Apr 05, 2012 at 10:06:37 AM PDT

        [ Parent ]

        •  I don't have answers for you re: their deficit (5+ / 0-)

          The thing that is clear is that Detroit needs to consolidate. They are spread out over far too wide a geographic area for the city to provide effective services, given the precipitous drop in population. Mayor Bing knows this but making it happen is going to be incredibly difficult, both practically and politically.

          They are in a bind, like the other aging manufacturing cities. They need to reinvent themselves to attract businesses and residents but have less and less revenue with which to do that all the time. That's why I say the state as a whole needs to invest in these cities. They simply cannot do it on their own.

          The problem with this is that the Snyder administration is doing the exact opposite. They have reduced revenue sharing (state tax monies collected locally that are then returned to the place they came from.) Instead, they are cutting funding to schools and municipalities in order to fund a $1+ billion tax cut for businesses.

          They may attract businesses but there's very little chance those businesses are going to set up shop in the areas that need it most. There may be a rising tide but, as Pastor Alexander Bullock says, "If you don't have a boat, a rising tide will drown you."

          "Back off, man. I'm a scientist."
          -- Dr. Peter Venkman

          Join me & LOLGOP at the new & improved

          by Eclectablog on Thu Apr 05, 2012 at 11:15:17 AM PDT

          [ Parent ]

  •  Thanks for the information, Eclectablog. n/t (0+ / 0-)

    Mother Teresa: "If we have no peace, it is because we have forgotten that we belong to each other."

    by Amber6541 on Fri Apr 06, 2012 at 08:36:48 AM PDT

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