Corporate-backed officials seek to subvert referendum on ‘dictator law’

A long-fought battle to place a referendum on the ballot to repeal Public Act 4 came closer to realization with a Michigan Supreme Court decision on Aug. 3. Backed up by American Federation of State, County and Municipal Employees locals in Detroit, activists had collected more than 226,000 signatures in a petition drive to put the initiative before voters in November.

Public Act 4, commonly known as the “dictator law,” is a union-busting, racist piece of legislation passed in 2011 by the Republican-dominated Michigan House and Senate. The law has resulted in the placement of emergency managers and consent agreements in the majority-African American cities of Benton Harbor, Inkster, Pontiac, Flint and Ecorse, and over the school districts in Highland Park, Detroit and Muskegon Heights.

Through these consent agreements, the law eliminates the authority of locally elected officials to make basic decisions involving public lighting, economic development, educational policy, public transportation, public safety and other issues normally decided by municipal legislative councils and school boards. Public Act 4 has served as the legal basis for the evisceration of city services and the layoffs of thousands of educational workers and civil servants.

Stand Up for Democracy, the main organizing force behind the petition drive, completed the campaign in February only to be delayed for 60 days by the state Board of Canvassers in Lansing, which deadlocked 2-2 in validating the petitions.

The organization was forced to go to the state Court of Appeals to demand that the referendum be placed on the ballot because two members of the Board of Canvassers said that the font size on the petitions was incorrect. This argument was struck down by the appeals court. Conservatives then appealed to the state’s highest court, resulting in a narrow 4-3 decision in favor of Stand Up for Democracy.

The validation of the petitions, which could come as early as the second week in August, will nullify Public Act 4 until the issue is decided by voters in November.

Conservative officials seek
to revive old law

Michigan has had an emergency financial manager law in place for many years under Public Act 72. Nonetheless, Public Act 72 did not have the sweeping powers encompassed in Public Act 4. Public Act 4 allows for the denial of workers’ collective bargaining rights and can result in the appointment of emergency managers who are allowed to disregard the decisions of local officials.

Public Act 4 opponents are seeking to once again challenge in the courts the reappointment of the existing emergency managers under Public Act 72.

In Detroit — which avoided the appointment of an emergency manager in April when the city council agreed to approve a financial stability agreement (FSA) — a new round of struggle has emerged over whether the FSA is valid in light of the Supreme Court decision.

Two other legal challenges to the validity of Detroit’s FSA were dismissed by the courts. A challenge filed by Detroit Corporation Counsel Krystal Crittendon was immediately struck down in an Ingham County court. The judge said that the city’s top lawyer did not have the authority to legally challenge the issue since she was not supported by the corporate-backed Mayor Dave Bing.

A challenge brought by three city employees was dismissed when the judge claimed there was no evidence that the FSA was illegal under the Detroit City Charter or that it was invalid, even though the state of Michigan owes Detroit hundreds of millions of dollars for a failed tax-revenue sharing plan and debts involving citations, water bills and land usage.

Emergency management and capitalist crisis

These laws are the response of the banks and corporations to the evolving capitalist economic crisis. According to the bank-driven Financial Review Team appointed by Gov. Rick Snyder, Detroit owes between $16 billion and $20 billion in long-term debt.

In 2010 alone, the city of Detroit was forced to pay $590 million in debt service to the banks. City services are already in an abysmal state, with an antiquated public transportation system, a lack of public lighting, and pay and benefit cuts imposed on municipal and educational employees.

The imposition of the FSA in Detroit is making things even worse. Recent actions by the mayor and city council will result in the elimination of city departments, the scaling down of the workforce by more than 2,500 civil servants and the implementation of the city employment terms that effectively throw out the tentative contract agreements between the unions and the administration.

Attorney Jerome Goldberg, an organizer with the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shut-offs, said that with Public Act 4 suspended, “the section that removes a city from the duty to bargain under the Public Employees Relation Act after a consent agreement is entered cannot continue to stand. Since the Emergency Manager Act is no longer in effect, the city now is subject to PERA and must bargain with its unions. It will be interesting to see what the unions do now.”

Nonetheless, Mayor Bing and other proponents of the FSA say that the agreement is a contract between the city and the state. Bing has indicated that the ongoing austerity plans being enacted against the city and its residents will not change.

Debt service moratorium needed

The Moratorium NOW! Coalition, which participated on a principled basis in the petition drive and other actions against Public Act 4, has also called for the suspension of debt-service payments to the banks. It is the banks that are strangling the city through the usage of predatory lending practices.

Since 2008, the Moratorium NOW! Coalition has pushed for a halt of foreclosures, evictions and utility shut-offs based on the ongoing and worsening economic crisis. The coalition believes that the current financial stability program is only designed to ensure that the banks get paid what they say is owed by the people of Detroit and other municipalities.

Moratorium NOW! Coalition activists have organized demonstrations against some of the largest holders of municipal debt. JPMorgan Chase and Bank of America are the top two beneficiaries of the municipal debt crisis through the collection of enormous amounts of public dollars that could go toward the restoration of municipal and educational services.