Michigan Moves Against Governor’s “Financial Martial Law” Bill

by on March 18, 2011 · 0 comments

in Civil Rights, Economy, Labor, Organizing

A crowd armed with signs gathers at a rally in Lansing on Wednesday, March 16, 2011, to protest Gov. Rick Snyder's budget. / SUSAN TUSA/ Detroit Free Press

After Thousands March in Michigan, Recall of Governor Floated

By Ian Millhiser / ThinkProgress / March 17, 2011

Yesterday, thousands of Main Street Movement protesters marched on the Michigan Capitol to protest Gov. Rick Snyder’s (R) constitutionally flawed assault on Michigan workers. Michigan’s voters, however, can do far more than simply make their displeasure known to Snyder and his allies in the state legislature. Michigan’s constitution is unusually easy to amend, and Snyder and his allies become eligible for a recall in just over three months.

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Thousands of Michigan Workers Protest Snyder’s Power Grab

by Mike Hall /aflcionowblog /Mar 16, 2011

More than 5,000—and the crowd is growing—Michigan union, community, education and other activists are on the Lansing Capitol grounds and inside the state House this afternoon to protest Gov. Rick Snyder’s (R) new “financial martial law.”

The Detroit Free Press reports that the crowd chanted “Take Michigan Back” as UAW President Bob King told the crowd, “This is one day in a long battle.”

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Michigan Governor’s Anti-Union Power Grab Is Unconstitutional

By Ian Millhiser / ThinkProgress / March 16, 2011

Michigan Main Street Movement Protesters March Against Gov. Snyder’s “Financial Martial Law” Bill

Although Wisconsin Gov. Scott Walker’s (R) anti-union crusade has received the biggest headlines, Michigan Gov. Rick Snyder (R) is poised to sign an even more drastic assault on working Americans into law. Last week, the Michigan legislature passed a “financial martial law” bill that allows Snyder to appoint “emergency financial managers” with the power to terminate collective bargaining agreements:

Contracts & Collective Bargaining Agreements. The bill would authorize the emergency manager to reject, modify, or terminate one or more terms and conditions 0f an existing contract.

After meeting and conferring with the appropriate bargaining representative and, if in the emergency manager’s sole discretion, a prompt and satisfactory resolution were unlikely to be obtained, the emergency manager could reject, modify, or terminate one or more terms and conditions of an existing collective bargaining agreement.

There’s a pretty serious problem with this power grab, however — invoking it would violate the Constitution. The Constitution forbids state laws “impairing the Obligation of Contracts.” This provision provides a robust limit on a state’s ability to dissolve contracts between the government and a private party. As the Supreme Court explained in United States Trust Co. v. New Jersey, state laws impairing such contracts must be “reasonable and necessary to serve an important public purpose.”

The bill does contain some language requiring the emergency manager and the state treasurer to determine that they are not violating this constitutional limit before a collective bargaining agreement can be blown up, but Snyder’s own budget gives the lie to any claim that an assault on working Americans is “necessary” to ensure that Michigan governments can pay their bills. Snyder proposed a massive $1.73 billion business tax cut even as he was arguing that his anti-union power grab was necessary to restore the state’s fiscal balance.

The consequences of Snyder’s actions could be stark. If a state is free to break contracts whenever they feel like it, than no one will agree to do business with the state. Investors will refuse to buy the state’s bonds, and state contractors will demand all payments upfront out of fear that the state will accept their work and then tear up the contract requiring the workers to be paid. Creditors will charge the state enormous interest rates to secure against the risk that the state will just waive its hand and make its obligation to repay go away.

In other words, Snyder is so determined to chip away at collective bargaining, he’s demanded a power that he cannot constitutionally use and that would drive his state into an even deeper financial hole if he ever tried.


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