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Cover Story - Legislative Reform
The Sweet Smell of Success
By Samantha Harkins
The new year ushered in a new era for Lansing—Republican control in the Michigan House and Senate as well as a new Republican governor who promised to do things differently. Governor Snyder has certainly pushed the envelope and changed the way things are done here at the capitol. For local units of government, this new establishment has resulted in some major changes to the way we do business. Major reforms that were only a pipe dream even half a decade ago have now been signed by the governor. In terms of cost savings reforms, this has been a good year.
The changes to PA 312 make a community’s ability to pay the primary factor an arbitrator must consider in an arbitration proceeding. It also defines the term “ability to pay” in order to create more consistency in arbitrations. The legislation requires an arbitrator to consider internal as well as external comparables. For years, there was no requirement that an arbitrator consider the pay and benefits of other bargaining units within the community. The use of internal comparables will show a more complete picture in the arbitration process and help to preserve internal equity and morale within the organization. A further change to Act 312 speeds up the arbitration process to 180 days and moves up the parties’ last best offers, requiring submission following mediation.
A tighter timeframe will help reduce costs, direct and indirect, related to binding arbitration. More importantly, quicker resolution may promote more positive labor relations. Future police and fire authorities will be covered under PA 312; however, existing authorities are mostly grandfathered with a few exceptions. These significant changes, particularly the changes to ability to pay, are a huge victory for local units of government.
Further changes for local units came with PA 54 of 2011. It freezes wage and benefit levels after a contract expires and prohibits retroactive wage increases greater than those in the expired bargaining agreement. This new law will result in significant cost savings because contracts are being settled more quickly.
Urban Cooperation Act
The Senate responded to the House amendments by including an amendment requiring unexpired contracts to be transferred—a sticking point with the House. The House subsequently stripped that language and sent the bill back. After a workgroup meeting with all interests, the major differences appear to have been ironed out. We expect the Legislature to wrap up this reform piece quickly after the summer break.
Health Care Reform
In conclusion, though there are a few loose ends to be tied up, this has been a great year for local government cost savings reforms. These reform measures—taken individually and as a package—have created many options to help communities.
What is PA 312?
What was the effect of PA 312?
Perhaps of greatest concern was arbitrators’ heavy reliance on external pay data in the PA 312 process. This resulted in police/fire employees having significantly more generous compensation packages than other employees working for the same municipality. This type of disparity compromises internal equity in favor of comparisons with an external labor market. Further, the external market considered in the arbitration process often overlooked a community’s location, size, or financial health.
Online Publication of Legal Notices
As expected, the press associations opposed the legislation due to a perceived lack of government transparency. We countered by saying this legislation would actually bring about more transparency since it expands public access to legal notices. We also informed the committee of the cost savings impact this would have—a poll of about a quarter of our membership showed publication costs of about $1.2 million—not including the city of Detroit. City Clerk Janice Winfrey testified that the city already spent $350,000 this year (2010) on public notices. As of August 2011, the bill is still in committee.
Testimony from Members
“Involvement in the League allows for a multitude of advantages. In addition to supporting issues that are important to elected officials and their constituents, involvement in the League provides a platform for networking and interaction with fellow dignitaries and officials across the state. The League seeks to provide one collective voice for Michigan communities while simultaneously advocating for improved communities and an improved Michigan.”
“In anything, you can sit on the sideline and complain or you can make a difference,” Auger said. “I’ve always been one that’s been not waiting to see what happens. Control your own destiny. If you don't like something, work to
Samantha Harkins is a legislative associate for the League. You may reach her at 517-908-0306 or email@example.com.